The downgrade to A2 reflects a material decline in the district's financial position, which is not expected to improve in the near term given rising fixed costs and a lack of financial flexibility. This financial weakness is exacerbated by the district's dependence on volatile state aid revenues and the ongoing financial troubles of the City of Schenectady (GO rated A3, negative outlook), which guarantees the district's property tax revenues. In fiscal 2011 and 2012, the city was late in remitting guaranteed property taxes to the district. Moody's will carefully monitor the timeliness of this transaction going forward as further strains on the district's cash flows, which already require annual-short term borrowing, may result in additional negative rating pressure.
STRENGTHS
Tax base is sizable compared with similarly-rated school districts
Above average debt burden offset by significant state building aid
WEAKNESSES
Primarily built out base with below average wealth levels
Guarantee of property tax revenues from the City of Schenectady has become unstable due to financial weakness at the city level
WHAT COULD MAKE THE RATING GO UP
Trend of operating surpluses leading to substantial reserve growth
WHAT COULD MAKE THE RATING GO DOWN
Narrowing of general fund reserves beyond current expectations
Significant deterioration in the tax base
Narrowing cash levels leading to a material decrease in liquidity
The downgrade to A2 reflects a material decline in the district's financial position, which is not expected to improve in the near term given rising fixed costs and a lack of financial flexibility. This financial weakness is exacerbated by the district's dependence on volatile state aid revenues and the ongoing financial troubles of the City of Schenectady (GO rated A3, negative outlook), which guarantees the district's property tax revenues. In fiscal 2011 and 2012, the city was late in remitting guaranteed property taxes to the district. Moody's will carefully monitor the timeliness of this transaction going forward as further strains on the district's cash flows, which already require annual-short term borrowing, may result in additional negative rating pressure.
STRENGTHS
Tax base is sizable compared with similarly-rated school districts
WEAKNESSES
Primarily built out base with below average wealth levels
Guarantee of property tax revenues from the City of Schenectady has become unstable due to financial weakness at the city level
WHAT COULD MAKE THE RATING GO DOWN
Significant deterioration in the tax base
Tax base is sizeable? Since when?
Since the FACT is (and EVIDENCE has proven), people with wealth are NOT moving into the city, don't expect this weakness to go away
More EVIDENCE of the city NOT improving financially, contrary to what others one other person claims but won't provide any evidence.
The EVIDENCE is showing annual SIGNIFICANT deterioration of the city's tax base, PROVEN by the assessment rolls, and NO ONE on these boards can provide even one shred of evidence to the contrary
Optimists close their eyes and pretend problems are non existent. Better to have open eyes, see the truths, acknowledge the negatives, and speak up for the people rather than the politicos and their rich cronies.
There's no Moody's in a Renaissance. As a matter of fact, where is the Gazetto with a puff piece about how wonderful everything is?? Maybe a rainbow and butterfly article about the ...um.....well...
How many ways can a school district fail the students and taxpayers? The list just keeps getting longer and longer.
You all notice that DV is too chicken, not man enough to address yet another Moody's downgrade in the city
Optimists close their eyes and pretend problems are non existent. Better to have open eyes, see the truths, acknowledge the negatives, and speak up for the people rather than the politicos and their rich cronies.
He came out when the Gazette printed that criminally insane article claiming Schenectady was in the black, and claimed the city was doing well. We questioned whether the article took note of the money owed to the school district, and the money the county was going to court over. Of course it didn't reflect that. Now we see the harm done to the school district by the city's creative math. By law, the school district can't just let things go when it feels it doesn't have enough money. They must have X number of teachers and classrooms for the amount of kids. They can't just decide to cut back to school once a week, they are much more restricted. They have enough problems with the way they state hands out aid, they don't need the city sticking it to its own school district as well.
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