After a review by Standard & Poors of the finances of District 233, the bond rating agency dropped the district’s rating by a point.
The district now has a rating of AA+. It had been rated AAA the past six years. Even with the step down, the Homewood-Flossmoor High School district is still among 32 high schools across the state to have the AA+ rating, according to District 233 Business Manager Lawrence Cook.
The school board got the report at its Jan. 18 board meeting. Cook said the rating agency pointed to two things in particular in making the change: the economic health of the South Suburbs and the drop in the district’s reserve fund.
“The first, naturally the school can not control,” Board President Steve Anderson said of the area’s economic well-being.
“The decision to use reserves was one (the school board) made because: 1) the district has the reserves to invest, and 2) the district at the time didn’t have sufficient borrowing capacity to cover the needs of the project,” Anderson explained.
While the area is rebounding from the economic impact of the 2009 recession, Cook said Standard & Poors did not believe the area’s economy is as strong as Lake County to the north and some other Cook County areas, such as the around New Trier and Naperville High Schools where schools hold AAA ratings.
The reserve fund is dropping as the board pays for a major construction project with cash on hand. The board in May 2019 agreed to spend $13.98 million on two additions to the South Building for the H-F’s Media, Visual and Performing (MVP) Arts Program.
The district is paying off the 2014 construction of the new field house and renovation of the North Building. Cook told the Chronicle “for Fiscal Year 2019, H-F’s debt service limit was $48.8 million with an outstanding balance of $22.6 million.”
For the next three years, the district will be paying $3.3 million in interest and principal, then a little more than $2 million annually through 2028. The district will make final payments of $1 million annually and the debt will be paid off in 2031, Cook explained.
In other business, the board gave Cook permission to apply for a state School Maintenance Project Grant of up to $50,000. He said if H-F is selected for funding, the money will be used for sidewalks and other paving around the new theater addition.
The board also gave permission to spend $175,000 with The Bandmans Co. for new band uniforms. The current uniforms are nearly 20 years old and need to be replaced.