District 51 receives Aa3 credit rating from Moody’s Investors Service
School District 51 announced Moody’s Investors Service assigned the district an Aa3 credit rating overall, with an A1 rating for the Certificates of Participation the Board of Education is considering. The credit review and rating stems the Board’s recent decision to consider Certificates of Participation to fund the construction of the new R-5 high school campus.
The high rating is good news for the district and the community, as Moody’s looks at both in developing its rating. Moody’s review of the local economy concluded that even though the community has had fluctuations in our tax base over the last five years, taxable values were stable in 2014 and 2015. The report noted, “increases in residential building permits and preliminary 2016 results indicate a 9 percent valuation growth with an expected tax base of $13.2 billion.” This is up from $12.1 billion in 2015.
The economic report noted that while the community will see oil and gas companies cutting payroll in the short term, their economists believe that cheap gasoline will spur tourism spending. For the long term, the report noted that renewed extraction of oil and gas, plus robust growth in health care will cause Grand Junction to out-perform the U.S. average. Looking at our median family income, Moody’s noted that resident wealth is above average for the state and on par with the U.S. average.
Regarding the School District, Moody’s noted that student enrollment is stable and likely to continue adding 25 to 75 students a year. The district’s direct debt burden is low, 0.9 percent of the fiscal year 2015 full value. The report also noted that the district’s debt structure is “strong,” with 100% of principal retired in 10 years. Prudent fiscal management of the school district has led to sound financial standing. Reserves are stable, and liquidity is favorable.
“The report does a few things,” commented Phil Onofrio, chief operating officer. “First, it ensures very low-interest rates for the COPs. Second, it lets the community know that the district is in a very positive position and has a low debt load. And, it lets the community know that the local economy is improving and expected to continue improving. These are all very good findings.”
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