Home ZZZ Broward County Wall Street Firm: Broward School Finances Are Good And Not So Good

Wall Street Firm: Broward School Finances Are Good And Not So Good

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bad-good-300x225By Buddy Nevins, BrowardBeat.com, Special to EyesOnNews.com, Dec 17, 2014 – Broward Public Schools financial picture is both good and not so good, according to Moody’s Investors Service.

The service assigned an A1 rating to $268.7 million in Certificates of Participation (COPs), Series 2015A. That’s the same rating as the rest of the school’s $1.6 billion in outstanding COPs hold.

And its the same rating that recent Miami-Dade School Board COPs have been given by Moody’s.  The Wall Street rating service congratulated Miami-Dade for its “strong management team,”  an observation that was not made when analyzing Broward’s debt.

COPs have been used by Broward (and other governments across the country) largely because they don’t require approval of the voters. COPs don’t need a referendum because they require a School Board to vote to repay them every year from the existing revenue streams.

The recent $800 million in bonds added to the revenue by increasing the millage.  That’s why those bonds needed voters approval.

The COPs rating announced last week is worse by one grade than the Aa3 rating on the district.

Aa3 is the lowest of the high-grade ratings. A1 is the highest of the upper medium grade.

Moody’s says the school system’s “stable outlooks reflect the slowly improving economy, expected financial improvement, and the sizable and diverse tax base.” It applauded the recent passage of the $800 million bond issue as “a positive credit factor given the district’s sizable short and long term critical capital needs.”

Now the not so good news:

The system “challenges” over its “ability to maintain an adequate level of reserves as budget pressures,” which persist and its continued “sizable capital needs.” Moody’s warns the rating would go down if there is “further financial deterioration” and continued “inability to adequately fund capital needs.”

Broward’s rating would improve if it had an “improvement in district cash and reserves” and “long-term capital funding sources and adequate funding of capital needs,” according to the rating service.

The take away:  Moody’s believes Broward taxpayers need more debt to repair and replace deteriorating schools.

That’s no surprise.

Superintendent Robert Runcie has warned repeatedly that the $800 million in new bonds would only cover about one-third of the needed modernization.

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An experienced TV News manager, Mark Young is highly regarded as one of the most well respected and trusted media leaders in Florida. In over 40 years in the broadcast industry, Mark has managed news operations in small and large markets throughout the United States. As Broward Bureau Manager for CBS4 News, Mark was responsible for all news developments throughout Broward and Palm Beach Counties. Mark now oversees the daily publication of two online news sites “South Florida Reporter” and “Southwest Florida Reporter.”