Brevard Public Schools Receives Second-Highest Rating By Fitch For Conservative Finances
By Matt Reed, BPS // April 2, 2018
BPS given a “AA” rating by Fitch
BREVARD COUNTY, FLORIDA – Brevard Public Schools continues to impress credit-rating agencies with its careful budgeting and declining debt, despite recent challenges in funding school security and staff raises.
Fitch Ratings has given BPS a “AA” rating, its second-highest, with a “stable” outlook in a new financial analysis for 2018.
“The district’s conservative budgeting practices and policies have contributed to historically sound operations and strong reserves,” the Fitch report says.
“Long-term debt and pension liabilities are low relative to personal income and are expected to remain stable.”
The Fitch analysis follows a solid credit rating from Moody’s Investor’s Service, which cited the district’s healthy finances and declining debt.
“The district’s financial position is healthy overall,” Moody’s reported in January. “The credit position also reflects a manageable debt burden and a moderate pension liability.”
Those positive bond and credit ratings matter to BPS even though the school board has committed to a long-term plan for school construction that calls for no new borrowing or new types of taxes. The credit rating could save the district on other costs such as banking fees or refinancing debt, said BPS Chief Financial Officer Pennie Zuercher.
The new Fitch Ratings report says Brevard Public Schools’ one relative weakness is its “revenue framework,” which is provided through a state formula that combines property taxes and state funding. Revenue from that formula did not keep pace with inflation over the 10 years ending in 2017 and has “lagged the growth rate in state revenues,” Fitch says.
For the past two years, the Legislature has voted to “roll back” local property-tax rates for schools so that rising property values of existing homes and businesses do not result in higher property-tax bills for owners – or higher revenue for school districts.
In 2018, all new property-tax revenue would come from new development in Brevard and would be offset by a state mandate to add armed police resource officers to all schools.
Meanwhile, Brevard Public Schools has slowly but steadily reduced its debt from past school construction from $512.1 million in 2012 to $446.7 million in 2016. Future schools planned for Viera and West Melbourne will be built with impact fees on new development in those areas under BPS’ five-year capital plan.
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