NEW ROCHELLE, N.Y. -- Moody's Investors Service has affirmed the Aa2 rating on New Rochelle School District's $53.6 million in outstanding general obligation debt in addition to removing its negative outlook.
The Aa2 rating reflects the district's substantial tax base, above average socioeconomic indicators and reserve levels below what is typical for the rating category, according to Moody's.
Moody’s cited the district’s sizable tax base, its conservative budgeting practices and large scale development with the potential to expand the tax base as its credit strengths.
“We are proud of our significantly positive financial improvement,” said Schools Superintendent Brian G. Osborne. “This Moody’s rating is reflective of our joint efforts with the Board of Education to change the district’s approach to budgeting. Assistant Superintendent Jeff White and his talented financial team have validated to Moody’s the district’s financial viability to the point that in addition to affirming our current rating, Moody’s has removed its negative outlook.”
In 2015, a new management team came in with a mandate to repair the district’s finances and infrastructure. In its credit opinion, Moody’s wrote: “The superintendent and assistant superintendent for business and administration have demonstrated experience with rebuilding the finances of distressed districts.”
The report said in the fiscal 2016 school year, the first full fiscal year under new management, the district increased its expenditures by 1.9 percent and balanced the budget without the use of fund balance and a 1.99 percent tax levy increase.
The district projects it will end the fiscal year with an operating surplus that will bring its unassigned fund balance to around four percent. In addition, the Moody’s report noted the district's direct debt burden of 0.7 percent of full value will remain stable in the near term given planned future issuance timed to begin when debt service on outstanding bonds tapers off. Overall debt burden remains a manageable 1.9 percent when overlapping debt and state aid is taken into account. Amortization of principal is rapid, with 100 percent retired within 10 years, according to the report.
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