Moody's Upgrades District's Rating from Baa2 to Baa1 - Says Outlook is Positive

Moody's Upgrades District's Rating from Baa2 to Baa1 - Says Outlook is Positive
Posted on 09/28/2020
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On September 16, 2020, Moody's Investors Service upgraded the West Allis-West Milwaukee School District’s credit rating from Baa2 to Baa1 on the general obligation unlimited tax (GOULT) bonds of West Allis-West Milwaukee School District. Concurrently, Moody’s identifies the District’s outlook as positive.

According to Moody’s, the upgrade to Baa1 reflects the district's improved financial operations and utilization of one-time revenue windfalls to boost operating reserves and liquidity and to retire a large bullet maturity of general obligation debt.  The rating also considers the district’s large suburban tax base with slightly below average resident income indices and low unfunded pension liabilities and debt, the latter of which may increase given outstanding capital needs.  The positive outlook reflects the likelihood that the district’s rating will move up if its strengthened financial position is maintained.  

“The positive outlook reflects the expected ability to maintain our current financial position due to the implementation of increasingly accurate budget tracking measures,” said Director of Finance and Operations, Caitlin Windler.  “Today’s financial picture puts us in a better position to strategically plan for the future implications of declining enrollment on our revenue limit.”

In the 2019-2020 fiscal year, the District paid off a $24 million debt in Fund 38 that was initially incurred in 2016.  For the last three years, this debt has had a corresponding interest payment of approximately $1 million per year.  As a result, the district’s Fund 38 interest payments are reduced moving forward, freeing up additional dollars within the Fund 10 property tax levy for general school district operations.  

Superintendent Dr. Marty Lexmond and his team have worked hard to improve fiscal stability while increasing school performance as measured on Wisconsin State Report Cards.  “We’ve worked diligently to strengthen our financial position and we will always be vigilant when it comes to our resources.  The Moody’s rating is significant because it is another positive step forward,” said Lexmond.