WCSD Receives Favorable Financial Ratings: District now has “AA” ratings from both Moody’s and S&P
Contact: Victoria Campbell
WCSD Receives Favorable Financial Ratings
District now has “AA” ratings from both Moody’s and S&P
Reno, NV (November 27, 2019) – Moody’s Investors Service has upgraded Washoe County School District’s (WCSD) bond ratings from A1 to Aa3, reflecting a positive assessment of the District’s creditworthiness with its debt obligations. At the same time, Standard & Poor’s (S&P) reconfirmed their rating of Washoe County School District’s general obligation debt as “AA”. As a result, WCSD now has a double A rating from both major ratings organizations. A triple A rating (i.e., AAA) is the highest possible rating; however, there are very few public agencies with a rating that high.
Bond ratings from the credit rating agencies are important because investors that buy long-term municipal bonds sold by the District and other government entities look to these ratings as a gauge of the financial strength of an agency. The better an agency’s credit rating is, the lower the interest rate the agency generally has to pay when it sells bonds in the bond market.
Both Moody’s and Standard & Poor’s commented favorably on the Board of Trustees’ reserve policy which targets a fund balance in the General Fund of 8 percent to 10 percent of expenses, the District’s adoption of priority based budgeting and its efforts to reduce costs, and the recent success the District has had in balancing its General Fund budget. Both agencies noted that the District has gone from a deficit spending position each of the prior three fiscal years to a surplus in the most recent fiscal year that ended on June 30, 2019. The District also has a balanced budget in Fiscal Year 2019-20.
In their report announcing the ratings upgrade, Moody’s noted that “the district’s financial profile is much improved over previous years” and that “we view the district's management team as strong given their ability to implement a priority budgeting system and move the district towards more sustainable operations.”
“The rating upgrade by Moody’s and confirmation of our AA rating by S&P are affirmations of the very hard work that the District has undertaken to balance its budget”, said WCSD Board President Katy Simon Holland. “We are pleased to be able to serve the taxpayers of Washoe County by earning reduced borrowing costs.”
WCSD Chief Financial Officer Mark Mathers noted that he appreciated that both credit agencies recognized that Washoe County School District achieved a balanced budget one year ahead of the Board’s direction given in 2018.
“While the District continues to have financial challenges,” Mathers said, “the Board and management are committed to long-term fiscal sustainability and a disciplined approach.”
The District plans to sell $100 million of general obligation bonds pledging WC-1 sales tax revenues on December 10, 2019. The proceeds of this bond sale will provide financing for the construction of a new elementary school in Cold Springs and partial construction of the new Procter Hug High School in the Wildcreek area.
The District plans to sell additional bonds in the first half of 2020 for the remaining costs of the new high school. The “AA” bond ratings for the sale on December 10 should help lower the District’s interest cost.