Improvements in the Rochester City School District finances have led Moody’s Investment Services to upgrade the city’s credit rating.
Moody’s rates bonds based on the risk of the investment. Lower ratings can mean a municipality or entity pays higher interest rates when it borrows money.
The credit rating was a source of concern over the past couple of years as the district kept announcing an ever-growing deficit.
The report indicated that the district has “significantly improved governance as a result of the 2020 appointment of a state independent monitor to oversee the district’s financial operations and educational achievements,” according to a news release from the RCSD.
Moody’s also indicated that the upgrade is based on continued improvement in the district’s general fund and an expectation that reserve balances will continue to improve over the next two years.
Moody’s upgraded the city’s credit rating from negative to stable and rated its bonds A2. The designation is the sixth-highest, according to nasdaq.com.
The announcement from Moody’s came a week after RCSD Superintendent Lesli Myers-Small proposed a balanced budget of $979.7 million for the 2021-22 academic year. The proposal is $52.1 million more than the original budget for the current year.
“This affirms the work that we have been doing in partnership with our State monitor to improve our fiscal stability,” Myers-Small said in a news release. “This is a significant achievement and requires the continued partnership between the District/Board of Education, the state appointed monitor, and the city of Rochester.”
Shelley Jallow, the independent monitor appointed by the state, said she was pleased the district has begun “correcting decisions that have impacted its finances. I encourage the district to stay the course in continuing to make the necessary difficult financial decisions and commend them for this accomplishment.”