Moody’s assigns district highest credit rating
April 8, 2019 - Moody’s Investors Service has assigned an Aaa underlying and Aa2 enhanced rating to Edina Public Schools (EPS) for the district’s biennial bond issue for Long Term Facilities Maintenance (LTFM) projects. In its report, Moody’s cited stability and community support as key credit strengths.
EPS is one of three districts in the state with an Aaa credit rating, the highest rating granted to school districts. “A high credit rating helps us manage the cost of maintenance projects by allowing us to obtain the lowest interest rates available when borrowing funds. We are very pleased with Moody’s report,” said Margo Bauck, director of business services for the district. “This reflects sound financial management that occurs collaboratively with many district partners, as well as the on-going support of our community.” Bauck said EPS has maintained the highest credit rating for “many years.”
The Moody’s credit analysis report states that the Aaa underlying rating reflects the district’s “large and wealthy tax base, strong income levels, and satisfactory reserves and liquidity.” Moody’s reports that the stable outlook reflects the expectation of strengthening district financial operations supported by recent voter approval for a levy increase that will “support moderate growth in reserve levels over the next two years,” the district’s limited additional debt plans, and “stable enrollment and positive inflows from neighboring districts.”
The School Board approved the LTFM budget and related bond issue in December 2018. LTFM is financed through a combination of an annual levy and bonds, which are issued every other year. District architects, construction management, district Buildings & Grounds leadership, and financial consultants worked in partnership on a budget plan that addresses 2019 and 2020 projects. Included in the plan is addressing the mechanical needs in the Edina Community Center within the next two years, rather than four years as originally planned.
The plan results in no overall change to the tax rate. The district will issue $24.2 million in general obligation bonds.