Roswell Independent School District went to market this week to sell $6.5 million in bonds following another national report that found the district had underlying fiscal challenges.
A Moody’s Rating report assigned the district another lukewarm rating, assigned an Aa2 underlying and an Aa1 negative outlook enhanced, for its general obligation school building bonds sale.
The same rating was given to RISD last year.
“The bonds are secured by ad valorem taxes that are levied against all taxable property within the district without limitation as to the rate or amount,” according to the report issued Monday.
RISD Asst. Superintendent for Financial Operations Chad Cole said the district was pleased with the rating but the report does have some impact.
“Anytime Moody’s Rating agency says something, it affects the bond sale,” Cole [auth] said. “But they’re giving all the other states that are tied into federal dollars the same negative outlook.”
Moody’s ratings—the “mother-of-all” credit reports for public entities—are meant to provide investors with a simple system of assigned grades and an in-depth look into the credit quality of a bond issuer. Each report is a credit analysis that provides financial strengths and risk factors.
Several smaller districts within the state recently received similar ratings. Los Alamos was assigned the same rating in 2012 for a $5 million general obligation bond sale, Farmington Municipal was given identical ratings when it went out for $14 million in building bonds and Alamogordo Municipal was tagged with a lower score for its $6 million bonds sale.
The “negative outlook” tied to the state rating has more to do with recent federal budget cuts and “it’s based on what’s been going on at the federal level. It is what it is,” Cole said.
“It’s really outstanding for a district our size in the state of New Mexico,” Cole said. “Were a strong school district. We’re financially sound and we’re really pleased with the rating. Very few districts get a bond rating better than us.”
Moody’s found the weak socio-economic profile of the district affected the rating and a substantial tax base expansion and diversification and improved socioeconomic profile, and trend of favorable financial operations that would bolster financial reserves would improve the rating.
RISD plans to gather all bidders for the $6.5 million in bonds and present them to the school board to select a purchaser at its regular meeting at 6 p.m. June 11.
The money will be used to further the district’s capital improvement plan.
The district is in the process of upgrading or reconstructing several of its 19 schools, Cole said. Many of the buildings haven’t been remodeled or renovated since 1965. With many of the projects, the state will provide 72 percent in matching funds once RISD can secure the bond funds.
“It’s a huge opportunity for the community to bring in dollars, projects and jobs associated with those projects,” Cole said. “It’s really exciting.
“I would say, compare our bond rate to any school district around the state. We’re in really good shape. We have sound financial controls. We’re just really excited with what we’ve been able to do.”