MTSD's Credit Shows Maximum Conservatism & Stability
SUMMARY
Aaa is Moody’s highest rating, indicating MTSD is an excellent credit risk.
MTSD credit has been Aaa rated for 11 years in a row (since 2010).
Only 3 of 421 school districts in Wisconsin hold this highest rating.
Aaa indicates strong historical financial stability and conservatism.
Strong credit saves taxpayers money on referendums and leaves more dollars available for operations on working capital loans.
Example 1: Working Capital Loan
MTSD borrows money annually to cover cash flow shortages resulting from the timing of tax payments from the State of Wisconsin. MTSD uses cash reserves plus short-term borrowing to fund operations until the bulk of tax payments are deposited in spring.
A bond rating lower than Aaa results in higher interest costs, leaving fewer dollars available to fund operations.
Example 2: Referendum Borrowings
As of the May 4, 2020, Board of Education Meeting, the Referendum Financing Plan was:
· $40.7 million at 2.90% on 6/20/2020 (audited financials state 2.00-3.00%), for 20 years.
· $15.0 million at 2.50% on 6/1/2021, for 10 years.
A bond rating lower than Aaa results in higher interest costs and a higher tax burden to property owners.
MTSD Release
Moody’s noted the following strengths in its ratings rationale for MTSD: (1) strong management team with multi-year budget forecasting plans, (2) the district’s commitment to retaining current fund balance levels, (3) demonstrated ability to outperform budgeted projections, (4) moderate debt and pension burden, and (5) a strong local tax base. https://www.mtsd.k12.wi.us/district/news/story-details/~board/district-news/post/mequon-thiensville-school-district-maintains-aaa-bond-rating
For details on Moody’s rating methodology, please see Moody's
US K-12 Public School Districts Methodology: Scorecard User Guide
Moodys School District Methodology
.pdf
Download PDF • 6.33MB
MTSD / Audited Financials
https://www.mtsd.k12.wi.us/departments/business-office/budget-finance
Moody's / Rating Scale and Definitions https://www.moodys.com/sites/products/productattachments/ap075378_1_1408_ki.pdf