The financial picture at the Homewood-Flossmoor Park District has improved enough that Standard & Poor’s has upped the bond rating for the district.
Standard & Poor’s gave the park district an A- rating, a step up from its previous BBB rating. Standard & Poor’s Financial Services LLC is one of three major agencies that issue credit ratings. The rating can be considered a financial indicator to potential investors of debt securities, such as bonds.
The A- rating is a good sign for the district, but tells lenders the park district “could be somewhat susceptible to adverse economic conditions and changes in circumstances” as happened with the 2008 recession, said Sharon Dangles, superintendent of finance and administration.
With the economic recession of 2008, the equalized assessed valuation (EAV) of properties in the Homewood-Flossmoor area dropped. That hurt taxing districts here, including the park district, “but we are starting to see improvement as EAV has rebounded a little over the last two years,” Dangles said.
H-F Park District regularly issues General Obligation (GO) bonds. The rating improvement is likely to mean the park district will see a reduction of the interest rates on the bonds it sells.
In November, the park district sold $1.27 million in bonds.
“Of that, $324,210 was for the purchase of golf carts (for Coyote Run Golf Course) and the remainder for capital projects, such as maintaining roofs, parking lots, HVAC systems, along with playground replacements, equipment purchases, computer equipment, etc.,” Dangles said.
“The park district has a track record of never missing or being late on a bond or interest payment, even in the most challenging economic times,” she added.
S&P initiates financial review about every two years, Dangles said. Before issuing it’s A- rating in January, Standard & Poor’s reviewed the park district’s comprehensive annual financial report and then sent the park district’s administrative team questions on the report and the district’s financial outlook, she explained.
“An interview took place between the park district, S&P and our financial adviser, Speer Financial. After the interview we had the revised rating,” she said.