Citing the district's excellent and much-improved financial management, Hopkins Public Schools recently received a new bond rating that jumped two rating increments—Baa1 to A2—from Moody's Investor Service. This improved rating will enable the district to obtain better rates for bonds, lower interest rates, and more competitive bids from firms buying bonds.
Improved Financial Operations
According to Moody's, the A2 rating assignment and upgrade reflect the district's significantly improved financial operations; a wealthy suburban Minneapolis tax base that is experiencing continued appreciation growth; and a debt burden that is expected to remain manageable despite future borrowing plans.
Key Financial Management Improvements
Key management areas identified by Moody's as the basis for increasing the school district's bond rating include:
- emerging from statutory operating debt a year earlier than anticipated;
- making tough and significant expenditure reductions to budget for operating surpluses in order to restore the district's fund balance to appropriate levels;
- community commitment as displayed by an increase in the local operating levy in November 2005;
- approval and commitment to a revised fund balance policy that was adopted by the Hopkins School Board in February 2007, which states the district will maintain an unreserved, undesignated fund balance of at least 6 percent of expenditures;
- use of a long-term financial forecasting model; and
- ability and willingness of the Hopkins School Board and district administration to make expenditure reductions when necessary to retain or increase the district's general fund reserve levels.
Positive Trend of Improving
Moody's anticipates that the district's positive trend of improving its financial results will continue based on the strength of the district's new management team, and the district's demonstrated willingness to make expenditure reductions and revenue enhancements.