The Watervliet City School District recently received good news about its financial standing. Standard & Poor’s (S&P) Global Ratings has raised the district’s long-term rating from ‛A-’ to ‛A’ with a stable outlook.
In the report, S&P Global Ratings credit analyst Lauren Freire noted: “The one-notch upgrade for the district reflects its recent strong performance after previous years of significant draws. The district’s ability to reduce expenses and generate additional revenue when its tax burden is primarily tax exempt, has allowed it to increase its total reserve position to $2.1 million in 2018 from its negative fund balance position of $57,000 in 2014. The stronger reserves and the expected break-even result in 2019 demonstrate the district’s full reversal from its poor operating environment that caused two straight years of negative fund balance.”
A bond rating determines how much interest municipalities (cities, towns, state, and school districts) will pay when borrowing money for infrastructure improvements and other significant investments.
The report continued: “The stable outlook reflects our opinion that the district will likely maintain its strong finances due to conservative budgeting. We also believe its stable, albeit limited local economy and low debt, coupled with rapid amortization, provides further stability.”
“This turnaround in our financial position has required a lot of belt tightening in recent years. While it has not been easy, everyone working together as a team has helped restore the district’s financial health,” said Superintendent of Schools Dr. Lori Caplan. “It may not sound like much to go from an A- to an A rating, but it will allow us to save thousands of dollars in interest charges on any future debt.”
S&P Global also reported that it does not expect to change the rating for the next two years.
More about S&P
Standard & Poor’s Financial Services is a financial services company. S&P Global Ratings is the world’s leading provider of credit ratings, which are essential to driving growth, providing transparency and helping educate market participants so they can make decisions with confidence.