TAVARES – The Lake County School Board’s credit rating was recently upgraded from an “A” to an “A+.”
The announcement from S&P Global Ratings (previously Standard & Poor’s) said, “The upgrade reflects the district’s recent strong operational results and subsequent boost in total available reserves, in addition to good tax base growth that supports local revenue collections.” It also stated that the district maintains a strong budgetary framework and has strong policies in several areas that should support stable operations.
“Its reserves have improved substantially over the last six years,” the summary reads. “We expect the district will continue to identify revenue and expenditure opportunities to produce blanched-to-positive budgets.”
The district experienced two consecutive years of operating deficits in fiscal years 2016 and 2017, which led to declines in the available fund balance to $9.2 million, or 3% of the general fund expenditures. Since then, the district has posted six consecutive years of surpluses, with available reserves of $61.4 million or 14.6% of expenditures.
S&P attributed the change to “prudent budgeting and robust policies and practices that management has been diligent about following.” Specifically, the School Board has indicated that any draws on reserves will be minimal for out-of-pocket costs. The report also noted that federal funding addressing the impacts of COVID-19 contributed to the district’s financial growth. A portion of those federal funds was used to expand the voluntary pre-kindergarten program in Lake, which could increase K-12 enrollment in the near term.
Other highlights from the report include:
- Consistent positive operating performance, leading to strong financial flexibility;
- Good policies and practices; and
- Low overall debt burden, with no plans to issue additional debt in the near term.
“This achievement reflects the diligent efforts and sound financial management practices adopted by the [School] Board,” Lake County Schools Chief Financial Officer Scott Ward said. “Attaining an A+ rating demonstrates to stakeholders, parents and the community that the School Board is dedicated to maintaining a strong financial position and ensuring the longevity of our educational institution. The A+ rating is a symbol of trust and confidence in the School Board’s ability to manage its financial resources efficiently and effectively.”
An A+ credit rating can give the school district improved access to capital markets and potential cost savings on borrowing expenses. It also enhances the board’s reputation, making it easier to attract potential investors, partners and donors.
“As we celebrate this achievement, it is crucial to recognize that maintaining and improving upon this A+ rating requires ongoing vigilance and continuous financial stewardship,” Ward said. “I encourage the School Board to remain steadfast in its commitment to sound financial practices, budgetary discipline, and implementing strategies that prioritize the long-term sustainability of our educational system.”
