Moody's downgrades Waukesha School District credit rating

Amy Hetzner:

For the second time in two years, Moody's Investors Service has downgraded the credit rating of the Waukesha School District, the latest time after the School Board voted to not allocate any money toward a $47.5 million debt owed to a European bank.

According to a Moody's report, the amount owed represents about 35% of the district's annual operating budget.

As a rule, lower credit ratings translate into higher interest rates for borrowing. However, Waukesha School Board President Daniel Warren said Monday that the credit rating drop should not have an immediate effect.

"When Moody's does a downgrade, it primarily affects long-term borrowing, and we don't have any long-term borrowing on our horizon," he said.

The A1 rating given to the district, which has a substantial tax base and relatively wealthy residents, is the lowest rating given by the service to school districts in the state, according to information from Moody's Investors Service.

Warren said his board decided not to allocate any money toward resolving the debt to DEPFA Bank because "the school district was not in a position to afford an additional $48 million in next year's budget."

Madison's current Assistant Superintendent for Business Services, Erik Kass, previously worked for the Waukesha School District.

Posted by Jim Zellmer at June 24, 2010 2:03 AM
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