From a report in CrossRoads News last week >>>
Moody’s downgrades DeKalb Schools credit rating
On Aug. 20, New York-based bond-rating agency Moody’s downgraded $384.9 million of the district’s debt. …
The agency said the downgrade reflects the district’s projection of negative fund balance in fiscal 2012, which is expected to remain negative in fiscal 2013 despite a tax rate increase and budgetary cuts.
“Additionally, the downgrade reflects the absence of plan to replenish reserves and Moody’s belief that the district will remain challenged to increase reserves in the near term due to limited revenue raising flexibility following a tax rate increase in fiscal 2013 and a significant reduction in staff over the last several years which we believe may limit the district’s ability to reduce expenditures in the near term,” it said.
This is the second time in two months that the DeKalb Schools had had a ratings downgrade. …
In June, the district finished the fiscal year by spending $34 million over what had been budgeted a year earlier. It spent $808.6 million in fiscal year 2012 when the School Board had set a $774.6 million budget.
- Enrollment has declined by over 6,000 students since 2006
- We overspent the board-approved budget by $34 million last year (additionally, the recent letter from SACS pointed out that the board and superintendent continually underestimate legal fees and utilities) Click the link below to download and read a pdf copy of that letter. AdvancED letter of aug 28 2012
- Countywide, the DeKalb tax digest declined by 9 percent this year from 2011 (about $41.6 million)
- Moody’s believes that “despite projections of negative fund balance in fiscal 2012, the district’s new management team has implemented significant budgetary adjustments that should lead to the stabilization and growth of reserves over the medium term.”
- However, “the ratings could go down with further reductions of reserve levels, if fiscal 2012 audited results show a larger than expected deficit, and if the district fails to regain structurally balanced operations.”