A roughly 120-year-old park district in central Illinois that failed to disclose a missed municipal-bond payment for several months had its credit rating slashed five levels into junk by S&P Global Ratings, which signaled another downgrade is possible.
Pekin Park District, a recreation area about 170 miles (270 kilometers) southwest of Chicago, missed a $416,000 debt-service payment in December on bonds issued in 2020. By S&P's count, it didn't reveal that until 102 days after the due date, when it made the payment in late March.
"The payment default reflects severe management deficiencies that have pressured cash reserves and liquidity and ultimately hindered the district's ability to obtain timely alternative funding to cover debt service," David Smith, an analyst at S&P, said in an April 10 report.
S&P lowered the debt to BB from A-, and said it remains on CreditWatch with negative implications. The steep downgrade reflected cash-flow challenges related to higher project costs and reduced state revenue, the ratings firm said.
The district, which includes a 1,300-acre park complex and was organized in 1902, is known for its Mineral Springs Park, golf courses and hiking trails, among other facilities. It serves Pekin, Marquette Heights and some of North Pekin, a combined area that S&P says has lost almost 9% of its population in the past decade, highlighting the economic strains.
Cameron Bettin, the district's executive director, attributed the missed payment to "several capital projects finishing up in the fourth quarter of 2025 combined with lower-than-expected revenues and rising costs associated with labor, goods and services."
The district "does not anticipate any future payment issues," Bettin said in an email. It has a $584 interest payment due in April, he said.
Pekin Park has cut expenses, Bettin said, and it's exploring ways to boost revenue. The district is looking at its fees, including for memberships, passes and rentals, and has "increased those accordingly," Bettin said.
Bettin also expects new revenue from fields at a sports complex and increased income from an arts venue built with donor funding. The park is installing a solar field to lower electricity costs.
So-called superdowngrades, typically seen as a drop of three or more steps, are generally unexpected given rating companies' periodic reviews, Lisa Washburn, managing director at Municipal Market Analytics, said in an email. Issuers typically have disclosure agreements with underwriters that require them to be transparent about events such as payment defaults, she said.
The district issued about $8 million in general-obligation bonds in 2020. S&P said they're secured by available recreation-fund revenue, proceeds from an annual sale of what's known as rollover bonds, and the district's unlimited-tax general-obligation pledge.
The proceeds were earmarked for refunding older debt, renovations at Mineral Springs Park and a dehumidification upgrade at its ice arena, according to bond documents.