Canyons School District has received the highest possible bond rating of Aaa from Moody’s Investors Service, and a AA+ – the second-highest rating – from Fitch Ratings.
“Moody's Investors Service has assigned an underlying Aaa rating and a stable outlook to Canyons School District,” according to a March 15, 2011 statement from Moody's Investors Service. The rating “incorporates the district's solid financial operations with ample reserves buttressing the district's short operating record, and modest debt profile featuring level taxing rates.”
Canyons voters in June 2010 approved a $250 million bond to renovate or rebuild aging schools, build a new high school in Draper, and forward the District’s efforts to better prepare students for college and careers.
The Canyons Board of Education on March 1, 2011 approved a resolution to authorize the issuance of up to $70 million in bonds to enable the District to break ground this summer on the first five building projects. The projects are the rebuilding of Midvale Elementary and Butler Middle School; a seismic retrofit for Sandy Elementary; a renovation of Albion Middle School; and the building of a new high school in Draper.
The bond ratings will help the District secure the lowest possible interest rates on the first bond issuance and ultimately, save taxpayers money.
Read about the Fitch rating on Trading-house.net.
The Board of Education on Tuesday, March 1 unanimously voted to stay the course on its Phase 1 bond building schedule, targeting a fall 2013 completion date for the first five projects, by using some of the District’s capital fund balance.
The Board approved a resolution to authorize the issuance of up to $70 million in bonds, as originally planned, to enable the District to break ground on all five Phase 1 projects this summer. The five projects are the rebuild of Midvale Elementary and Butler Middle School; a seismic retrofit for Sandy Elementary, a renovation of Albion Middle School and the building of a new high school in Draper.
Instead of issuing a second round of bonds next spring, the District will use money from the capital fund balance, which is an account dedicated to building projects. The District anticipates issuing additional bonds and beginning the remaining eight projects when assessed valuation improves and when old Jordan debt begins to substantially tail off.
The plan accomplishes several goals. It keeps intact the target fall 2013 completion date for the first five projects. It allows grade reconfiguration to move forward in fall 2013 as part of the District’s college- and career-ready academic plan. It also allows the Board to keep its promise to the public not to raise its debt service levy when voters approved the $250 million bond in June 2010.
Board members noted they have been talking about addressing building issues for the past two years, and praised the plan as a well thought out solution and first step in addressing the District’s $650 million in critical building needs.
Two weeks ago, the Board discussed building schedule options for the first five bond projects after learning property values are expected to decline for the third consecutive year. Declining property values would impact Canyons’ ability to collect sufficient tax revenue from its existing debt service levy to pay for the principal and interest on the total amount of new bonds needed to proceed with its current timeline. The Board had looked at the possibility of delaying projects one year or funding one or two projects at this time.
The Canyons Board of Education is discussing building schedule options for the first five bond projects after learning property values are expected to decline again this year. This would be the third consecutive year of property value declines, unprecedented in recent memory. Declining property values would impact Canyons’ ability to collect sufficient tax revenue to pay for the principal and interest on new bonds on its current timeline without a tax increase. The District also is legally bound to continue its payments on $213 million in old Jordan debt.
The Board noted it promised the public that its debt service levy would not be raised if voters approved the $250 million bond in June 2010, and remain committed to that pledge. In light of the financial projections, the Board discussed possible actions, including delaying all projects one year for a target fall 2014 completion and grade reconfiguration date; funding one or two projects at this time; or staying the course on all five projects in hopes of an economic rebound.
The five projects are: the rebuild of Midvale Elementary and Butler Middle School; a seismic retrofit for Sandy Elementary, a renovation of Albion Middle School and the building of a new high school in Draper. The current timeline would have the first five projects completed by fall 2013 to facilitate grade reconfiguration under the District’s career- and college-ready academic plan.
The Board will vote on the projects’ timeline in its March 1 meeting.