BREVARD COUNTY, Florida — The School Board of Brevard County successfully sustained its high credit ratings with both Moody’s and Fitch rating agencies, serving as a critical element in the refunding of some old Certificates of Participation, recently approved by the School Board.
The proposed school closings were cited as a positive financial management element by Fitch in the evaluation of Brevard County School District’s credit rating in a report issued on Monday, April 1, 2013:
“Financial management is strong as evidenced by historically prudent management of reserves despite volatility in state funding and, more recently, by the district’s immediate corrective action plan to solve a projected $30.7 million budget gap for fiscal 2014.
The imbalance is due in part to a failed sales tax referendum submitted in November 2012 in which the district sought approval for a half-cent sales tax to help subsidize capital needs. Projected revenues were estimated at $32 million and were expected to provide partial budget relief for the district, as the operating fund is funding a portion of capital needs and the current 0.25 mill critical needs millage, which provided roughly $8.9 million in revenues, is set to expire this fiscal year.”
Management quickly reacted to the failed sales tax proposal and announced the closing of three elementary schools. It has also proposed a number of program cuts, staffing changes and other cost saving measures which are expected to be implemented to correct the projected imbalance.”
“This is great news,” said Brevard County Schools Superintendent Dr. Brian Binggeli. “Failure to maintain these ratings could have cost the District approximately $1 million in higher interest charges.”
The School Board said that maintaining this high credit rating will result in a district gain of approximately $4 million.
For now, both credit agencies sustained BPS’ high financial-rating, however they warned that the loss of the critical needs quarter mill and the significant decline in capital revenue threatened the economic stability of the district. Moody’s specifically cited, “declining capital funds, and the inability to secure voter approval for capital sales tax” as a continued challenge to the district.