Columbus, OH, May 11, 2009- Columbus City
Schools (CCS) has once again secured top bond ratings from the country’s leading
rating services Standard & Poor’s (S&P), Moody’s and Fitch. The ratings place
the District among the top 40 districts in Ohio and one the best urban districts
in the country.
“The Columbus City School district’s
financial status continues to be strong based on good management practices and
accountability,” said Carol L. Perkins, Columbus City School Board President.
“These practices allow us to garner high grade ratings from the financial
community while continuing our focus on 100 percent student success.”
The $75 million of issued bonds is part
of the $164 million (of bonds) voters approved by a wide margin in November
2008. The District's ratings lower the cost of borrowing by about 3/8ths of 1%.
For the upcoming $75 million bond issue, this will reduce interest expense by
about $2.5 million over the 24-year repayment period of the bonds.
“Maintaining our high grade rating is a
crucial piece in the competitive pricing of the bonds which will save district
taxpayers $2.5 million dollars,” said Superintendent Gene T. Harris, Ph.D. “The
ability to maintain of these high ratings is a clear indication of the stability
of the District's finances and the Board's continued commitment to a balanced
budget.”
S&P’s outlook is stable and reflects
their expectation that, despite a trend of decreasing student enrollment, the
voters recent authorization of a new operating millage will give the district
“…the needed flexibility to maintain balanced financial operations.” S&P added,
“The district’s participation in the deep and diverse Columbus economy provides
additional rating stability.”
The ratings companies said CCS leaders managed the district's financial profile and levy cycle effectively and noted three key factors in the high ratings:
·
Access to Columbus' deep and diverse economic base
·
Strong management team who has been successful at managing the district's
financial position
·
Moderate overall debt levels despite the existence of a large capital
improvement plan
Moody's Investors Service
rated CCS "Aa3," a high-quality rating, and continuation of a high grade rating.
Moody's said the high grade reflects an "improving financial position, a stable
local economy and a manageable debt position.”
Standard & Poor's Ratings Services
rated CCS "AA-," a high-quality
rating noting the outlook is stable because of the recent passage of a new
operating levy, giving the district the needed flexibility to maintain balanced
financial operations.
Fitch Ratings
assigned an "AA" rating
reflecting the district's improved
financial strength, including progress on the material weaknesses noted in the
fiscal 2007 audit; the strong voter approval of an increased expense millage
rate; and the area's diverse economy.
The CCS is expecting additional revenue growth over the next several fiscal years due to the passage of a 7.85-mill operating levy in 2008 that officials expect to generate about $77 million of annual revenues. For the next several fiscal years, the district projects to generate general fund cash surpluses due to the additional revenues generated from this levy and also through $76 million of expenditure cuts over the next few years. The district will get half of the anticipated revenue from the levy in fiscal 2009 and a full year beginning in fiscal 2010. Despite the $1.3 billion capital improvement plan, Moody’s expects the district’s debt position to remain manageable.