For Immediate Release
Friday, August 15, 2003
The Madison Metropolitan School District maintained its Aaa bond rating - the highest rating available - by Moody's Investors Service, in its recent analysis of the district's fiscal situation. Only one other school district in Wisconsin has earned the Aaa rating. The Aaa rating allows the district to borrow money long and short-term at the lowest rate possible, providing benefits to property tax payers.
"We are extremely pleased by the confidence Moody's has placed in our fiscal operation. We continue to examine ways to streamline the district's budget and explore ways to increase efficiencies," said Roger Price, assistant superintendent for Business Services.
The rating places the district in the "prime" lending category. According to the Legislative Fiscal Bureau, Moody's most recent rating for the State of Wisconsin is a lower Aa 3 rating - or in the "upper medium" range for lending.
The August 8 report from Moody's in part said, "The district maintains a favorable financial position, aided by the conservative budgeting of a prudent fiscal management team, and voter-authorized receipt of nearly $20 million in excess revenues through 2005." The report also stated, "Moody's highest short term rating reflects the district's sufficient revenues, solid liquidity position, and reasonable cash-flow projections. The long-term Aaa rating reflects the district's sizeable tax base that derives support from one of the state and nation's strongest economies, a favorable financial position, and a modest level of relatively rapidly retired debt."
Moody's report to the district noted that, "Overall debt burden remains modest at 1.6%, while direct debt is very modest for a school district of this size (0.4%). Annual debt service comprises only 2.6% of core expenditures, even though the principal amortization is rapid (77% retired within 10 years).
"Preliminary fiscal 2003 balanced results reflect $7 million of savings enacted by district management, including reductions in staff, demonstrating the willingness of management to proactively address the challenges and maintain budgetary balance."
The rating produced almost immediate favorable results for local property tax payers. Due to Moody's ratings, the district was able to short-term borrow $53.1 million at 0.984 percent. A lending rate below one percent is unheard of, but the district's sound financial footing saved taxpayers over $130,000 compared to the current lending rates for other school districts.
Moody's cautioned that the continuation of state-imposed revenue caps, coupled with declining enrollment, could harm the long-term borrowing rating for the district in the future.
Public Information Office
545 W. Dayton St.
Madison, WI 53703
608-663-1879
email: newsrelease@madison.k12.wi.us
Last Modified: 2003-08-15
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