May 25, 2017
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Unified gets positive outlook from bond rating firm


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BY DENEEN SMITH
dsmith@kenoshanews.com


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Kenosha Unified School District’s financial future looks positive, according to a bond rating service.

As the school district prepares to sell nearly $37 million in bonds to fund energy efficiency and renovation projects at Tremper and Bradford high schools, Moody’s Investor Service has assigned KUSD a “positive” outlook.

Unified retained its Aa3 bond rating, but the new guidance moves the district from a “stable” to “positive” path, reflecting the possibility Moody’s may upgrade its rating of KUSD “should the district’s financial reserves continue to grow.”

Moody’s statement on the district lists Unified’s credit strengths, including its large tax base, budget surpluses that have led to stronger financial reserves and modest pension obligations.

Unified’s reserve fund balance has grown from 4 percent as a percentage of revenue in 2012 to 17 percent in 2016. The district’s policies call for a minimum fund balance of 15 percent, a maximum of 20 percent.

“We’re very proud of this because — in spite of our challenges, such as declining enrollment and revenue restrictions — we still have a positive outlook,” said Tarik Hamdan, Unified’s chief financial officer.

For schools or local government entities issuing bonds, Moody’s bond rating is akin to a credit rating for an individual. Investors consult it in purchasing bonds, with stronger ratings leading to lower bond interest rates, which ultimately lower taxpayers costs for repaying district debts.

Following the upcoming bond sale, Unified will have a total outstanding debt of $161.5 million.


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