S&P: White Gallatin Saline Counties Etc. Community College District 533, IL GO Debt Outlook Revised To Negative
"The negative outlook reflects the projected use of reserves and likely reliance on the working cash fund for liquidity after reduced state revenue," said S&P Global Ratings credit analyst Blake Yocom, "coupled with the potential risks should the state fail to adopt a fiscal 2017 budget for the fiscal year and no additional funds are appropriated for CCDs." In our opinion, a lack of additional appropriations for fiscal 2017 could weaken the district's financial position and cause liquidity concerns thereafter.
The outstanding bonds are secured by the district's unlimited ad valorem tax GO pledge
CDD No. 533, with an estimated population of 55,000, covers approximately 1,650 square miles in Saline, Gallatin, Hardin, and Pope counties and parts of White, Johnson, Williamson, and Hamilton counties. Credit hours peaked in 2010 at 46,861 and has since declined to 34,811, a nearly 26% decline. "The negative outlook reflects the at least one-in-three chance that we could lower the rating within the one-year timeframe of the outlook," added Mr. Yocom. It further reflects our view of the weakening financial situation in Illinois and the fact that the lack of additional state appropriations could weaken the district's reserves and liquidity position. We could revise the outlook to stable after receipt of regular state operating appropriations for fiscal 2017 that prove sustainable, coupled with a proactive management response leading to stabilized operations and reserves.