The District 233 financial picture have earned top ratings.
Two recent reviews show that the school board’s management of Homewood-Flossmoor High’s finances continue to earn a AA+ rating from Standard & Poors, a credit rating agency, and an outstanding score of 3.9 out of 4.0 on a financial review by Legacy Professionals LLP, the district’s accounting firm.
Lawrence Cook, chief school business official, shared the findings with the District 233 finance committee during its Feb. 8 meeting. The ratings were important to the district as it went into the bond market Feb. 15 to re-fund $12.16 million in debt from 2012 and 2013. The district got a rate of 2.2% on the bonds to be repaid by December 2029.
The district doesn’t carry much debt and it has money in its various funds to pay its bills. The board’s policy is to have 10 months cash-on-hand so that, in the event of an emergency, it could keep H-F operating for a school year.
Steven Anderson, chair of the finance committee who was on the call with S&P representatives, said, “They really discussed how our policy on the 10-month reserve was a big deal to them in giving us the AA+ rating.”
The district managed to maintain the AA+ rating since its last review two years ago, Cook said. The AA+ rating is one step below S&P’s top rating.
Anderson said he asked what the long-term affect would be if the policy was changed. While the S&P representatives wouldn’t give a definitive answer, Anderson expects a shift will have an impact on H-F’s standing.
“I guess we should keep in mind that if we do potentially decide to mess around with that policy it could affect our future ratings,” he said.
Superintendent-elect Scott Wakeley said S&P representatives also said a substantial change in the policy would require rationale for that change to show it wasn’t arbitrary but rather “something that’s thrust upon us” such as a legislative decision to shift teacher pension payments to schools.
The school board is considering two building projects in the next several years. The Culinary Arts program is requesting an industrial style kitchen in the North Building. The board is also considering how best to update the science labs.
The recently completed Fine Arts addition on the South Building was paid for using funds on hand. Bloom Township School Treasurer Bob Grossi told the committee: “Depending again on how much of your capital you wish to address, there would be a point in time where you have to make a decision on whether to issue debt to pay for these capital projects and spread it out over the years or drop below the fund balance reserve.”
In the annual financial report from Legacy Professionals LLC, H-F “received recognition which is the highest level of financial profiles” measured by five indicators, Cook told committee members. The indicators include the fund balance to revenue ratio; expenditures to revenue; the percentage of remaining short-term borrowing ability; percentage of remaining long-term borrowing ability; and days of cash on hand.
“We earned the highest possible recognition over the past five years, and we don’t have to be reviewed by the Illinois State Board of Education,” Cook said. He said ISBE hasn’t adjusted H-F’s financial position or auditing records the last five years.