71°
The Hendrick Hudson School Districts bond rating was downgraded by Moodys, which cited challenges from New Yorks 2 percent tax cap law, and declining property assessment values because of ongoing certioraris. The districts debt was reduced to an A1 rating from an Aa3 rating.
The downgrade is based on the continually deteriorating financial condition with no viable recovery plan as well as the additional challenges posed by the New York state tax cap, said Moodys in a release explaining the decision to downgrade the districts bond rating.
Moodys said $36.2 million of the districts debt was downgraded to A1 status from Aa3. About $10.76 million was already at A1, and remained at that rating.
A release about the rating downgrade was issued Nov. 23, the day before Thanksgiving. Bond ratings are essentially credit ratings for governmental organizations, and evaluate the relative risk that the district will not fulfill its financial obligations. A poor bond rating increases the borrowing cost of a governmental organization.
Part of the debt held by Hendrick Hudson School District fell from a rating of Aa, judged to be of high quality and are subject to very low credit risk, to A, considered upper-medium grade and are subject to low credit risk, according to Moodys ratings definitions.
Moodys also said, in the release about the downgrade, that a significant increase in the debt burden could worsen the bond rating, as could an inability to balance the operating budget and continued declines in cash and General Fund reserves.
One of the districts biggest assets, according to Moodys, is a sizable tax base with above average wealth levels. Moodys recommended regaining structural balance to improve the districts bond rating. A significant increase in the local tax base could also improve the bond rating.
Hendrick Hudson School District spokesperson, Rick McCormack, did not return phone calls for comment.
Click here to follow Daily Voice Cortlandt and receive free news updates.
