Standard and Poor’s recently affirmed the Hermiston School District’s strong issuer credit rating (ICR) of AA- with a AA+ enhanced and underlying rating. The credit rating, initially sought by the District prior to the sale of general obligation bonds in 2009, remains a full grade above the district’s previous Baa1 rating from Moody’s received in 1999.
District officials say the improved credit rating, coupled with its financial management practices, federal bond support, and fortuitous market conditions, is estimated to save Hermiston taxpayers over $30 million in interest over the life of the $69.9M in bonds sold.
In its rating report, S&P highlighted the following strengths of the District:
• Good financial policies and practices, including a policy to maintain a general fund balance of at least 8% percent of revenue
• Steady growth in weighted average daily membership, the primary driver of operating revenue under the state school funding framework
• History of strong available reserves.
“As the Hermiston community continues to grow and prosper, the District’s ability to maintain a strong credit rating will serve invaluable,” said Deputy Superintendent Wade Smith. “As prior bonds retire and new ones are authorized to support our region’s continued growth, a strong rating will generate significant financial savings for our taxpayers and community.”
Go online to view the report.