Fairview Park City School District’s bond rating recently received a rating upgrade from an Aa3 to an Aa2.

“The progress the district has made since 2006 has enabled us to achieve this increase,” said FPCS Treasurer Ryan Ghizzoni. “This is happening at the same time when six major US banks are receiving a credit rating decrease and most entities are trying to hold onto their ratings.”

Similar to a consumer, when one receives a better credit score, they have the ability to obtain better interest rates and ultimately save more money in the long run. Earlier this month, school officials visited Moody’s Investors Service to present the reasons why the district deserved the increase.  

“This is just another step in our efforts to provide our community with a school district it deserves,” said FPCS Superintendent Brion Deitsch. “Public education is the backbone of a community and like the students we serve; the resources provided to us by our community are to be protected and their abilities to be maximized.”

In a release issued by Moody’s on June 22, the upgrade to the Aa2 rating reflects the district’s strong financial management, ample cash reserves and limited exposure to the property tax levy cycle. The rating additionally incorporates the district’s modestly-sized and mature tax base in the Cleveland area, and above average debt burden with modest additional borrowing plans.

“We are obviously very pleased that Moody's Investment Services believes that our management of the district over the past several years warranted an upgrade of our bond rating from Aa3 to Aa2,” said FPCS Board President Joe Shucofsky. “An Aa2 rating is almost unheard of for districts with smaller tax bases like ours. This also represents the second upgrade for the Fairview Park City Schools since the Gemini project was passed and will result in significant savings to the district for years to come.”  

This is the second time since passing the bond in 2005 that the district has received a rating upgrade. In order to maintain this rating, the district will continue to remain fiscally responsible, but will also need to place a no-new money tax levy renewal on the ballot in November 2012. The purpose of the no-new money tax levy is to continue the revenue stream adopted by taxpayers in 2003.

Current FPCS Board Member and former Board President Dennis Rehor, who has been on the board since 2006, said “The bond upgrade is a big deal for our schools and the community, especially in this economy. A big deal. It is a testament to how far our district has come in terms of financial stability. Our district has gone from being a district stuck in a quagmire of financial instability – and all the problems that go with that – to one of the most financially stable districts in Northeastern Ohio. The upgrade in the district’s bond rating says it all in terms of how far our district has come over the last several years under the leadership of Superintendent Deitsch and Treasurer Ghizzoni. What a great day for the community of Fairview Park.”

The purpose for seeking the bond rating increase is due to the district’s recent action to refund a portion of the 2005 School Improvement bonds to capture substantial debt service savings. Originally, projections estimated the district could refund $8,634,988 of the outstanding bonds which would result in estimated savings of $727,390.76. However, due to Moody’s bond rating upgrade and the state of the market when the bonds were brought to market for pricing, the district was able to refund only for $7,980,000 with a higher savings to the taxpayers of $1,033,000.

“These savings directly benefit the taxpayer, and it will reduce the millage rate for them through 2033,” said Ghizzoni.