NISD's credit rating rises again

NISD Communications Department

June 17, 2008

For the third consecutive year, a major rating agency has increased Northside ISD's credit rating, which is good news for taxpayers and an indication of the District's stable finances.

Both Standard & Poor's and Fitch Ratings have increased the District's credit rating from AA- to AA.

"For a district of our size, it's very unusual to have such a high credit rating," said Oscar Cardenas, Assistant Superintendent for Budget & Finance.

Only 15 school districts in Texas carry the AA rating. No school district currently maintains the highest credit rating, AAA, independently. School districts may qualify for the coveted AAA rating by applying to have their bonds guaranteed by the Permanent School Fund. Northside carries such a rating.

Standard & Poor's previously increased the District's credit rating in 2006, and the country's third major rating agency, Moody's, increased Northside's rating from Aa3 to Aa2 in 2007. Moody's uses a different rating scale than Fitch and Standard & Poor's.

A school district that has a higher credit rating can sell bonds more easily and at lower interest rates, which means taxpayers will spend less to pay back the bonds. Bonds are used to fund new schools, renovations, technology, and school buses.

The District's ability to maintain financial stability during challenging economic times contributes to the higher credit rating, Cardenas said. The District's growing tax base also has an impact, he said.

"The upgrade of the district's underlying rating to ‘AA' reflects the district's consistently strong financial management and performance within a rapid enrollment growth environment, continued strong taxable assessed valuation growth, and its large and diverse employment base ...," a news release from Fitch Ratings states.

Superintendent John Folks said the increased credit rating is evidence of the District's commitment to fiscal responsibility.

"However, it will be a challenge to maintain such a high credit rating, given that the state's current school funding system doesn't account for the increased costs of operations from year to year," Folks said. "I assure you, though, the District will continue to make responsible financial decisions."

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