For this week’s non-disclosing Preliminary Official Statement, we’ve gone inland again, in this case to northeast Arkansas where hurricanes and wildfire are not the key contributors, but where inland flooding most assuredly is.
This week’s climate risk non-disclosure distinction goes to:
Rivercrest School District, AR
the OS for which can be found here.
The district lies within Mississippi County, an area that has been affected by flooding including a recent notable event in 2017, but certainly one doesn’t need to look to hard to find others. Our analysis has Rivercrest in the worst 1% of school districts nationally in terms of overall climate risk on property value, and the worst 0.1% nationally for inland flood risk specifically.
Within the Official Statement, “flood” does not appear once, but the tell-tale signs of flooding impacts are there in plain sight for those who have read our past analyses. The population in the school district has fallen 10% in the last 5 years, a rate consistent with our data dating back to 2012 for Mississippi County. Play this forward to 2034, the longest maturity bond included in this issuance. In terms of population trajectory, this is in the lowest 2% of counties nationally. We know from our analyses that the rate of population decline can be directly correlated to flood risk once you reach the higher echelons of inland risk across the US. Rivercrest is a case in point.
The county is not enrolled in the NFIP’s CRS program, so no indications outside the OS of any specific acknowledgment or action on flood risk there either. Needless to say, there is a dire need for resiliency or adaptation programs up and down the Mississippi River, and Rivercrest School District and the parent Mississippi County are prime examples of this if the communities are going to survive, let alone thrive. Keep in mind, as bad as its been, climate change is only going to make things worse.
We’re looking forward to working with issuers, bond insurers, sell-side, and buy-side market participants in disclosure, discussion and action on climate adaptation.