CARY – After recent years of serious financial woes, District 26’s bond rating from Standard and Poor’s Rating Service has improved.
This month the district received an AA bond rating from Standard and Poor’s. That rating is up from the district’s A2 rating with a negative outlook Moody’s gave to the district in 2010.
“This is just another sure sign that the district is recovering from the financial challenges it has faced over the last several years,” Superintendent Brian Coleman said in a news release.
The district pursued the new bond rating as it plans to refinance some of its current bonds in an effort to lower its debt, and manage to the promise it made during the 2010 referendum process, the news release said.
District officials had pledged to have a roughly $20 annual increase over four years in property tax bills for the average house that was worth $300,000 in 2010.
A better bond rating allows the district to get lower interest rates when it borrows money, Coleman said in a phone interview.
The bond referendum passed and helped stabilize the district’s financial future.
For those teachers not in the retirement pipeline, the Cary Education Association had agreed to a pay cut in 2011-12 and pay freezes during the 2012-13 and 2013-14 school years. Teachers also agreed to pay more for health insurance.
Over the past few years, the district has had to cut teachers, close schools and cut programming, including art and music. This year, the district has been able to bring back dedicated art and music teachers.
“It is a real credit to the continued support of District 26 by the Cary community as well as the sacrifices District 26 employees have made over the last several years to get us to an improved financial position,” Coleman added in the news release.
Last week, the District 26 school board formally voted to refinance $5.54 million in bonds, which were part of a series issued in 2004. The district is looking to take advantage of lower interest rates.
The bonds would still be paid back by 2019. The move is estimated to save the district $487,000 over the life of the bonds, the news release said.
The final proceeds are expected to be determined when a potential sale is finalized next month, according to the news release.
Next year, the district also may refinance bonds issued in 2005, which could save the district more than $500,000.
“Although we are not completely out of the woods financially, this clearly is another indication that the work and actions taken by the district are making a difference,” board member Scott Coffey said.