Don't believe us. Well, maybe you will believe the folks at Fitch. For those unfamiliar, Wikipedia says, "Fitch Ratings, is an international credit rating agency dual-headquartered in New York City and London. It was one of the three Nationally Recognized Statistical Rating Organizations (NRSRO) designated by the U.S. Securities and Exchange Commission in 1975, together with Moody's and Standard & Poor's".
Fitch Affirms Cave Creek USD No. 93 at 'AA-'; Outlook to Negative
In the course of surveillance, Fitch affirms the approximately $44.6 million in outstanding general obligation (GO) bonds of Cave Creek Unified School District (USD) No. 93 at 'AA-'. The Rating Outlook is revised to Negative from Positive. The district was placed on Positive Outlook on Aug. 24, 2006 based on Fitch's expectation that the district would maintain or improve its favorable financial position. Subsequent to Fitch's review, the district's financial position deteriorated during a period of leadership transition. The Negative Outlook is tied to Fitch's assessment that the district faces pressure from flattening enrollment, declining fund balances and a tax averse electorate.
The 'AA-' rating reflects the district's large tax base, which has grown through both home price appreciation and a merger with a neighboring school district in July 2007. Despite high area wealth levels, the district taxpayers denied its capital spending plan specifically aimed at improving the district's high school. In November 2007, the district failed to pass its capital override and bond initiative. The district's anticipated capital funding from the state for the high school remains uncertain due to expected cuts from the state's budget.
The district has historically had high fund balances. In 2004, the district's unreserved general fund balances equaled $3.1 million or 12.8% of total expenditures. After two years of spending deficits the unreserved balance fell to negative $125,000 in 2006. While general fund balance has been partially replenished since the low in 2006, it remains significantly below previous levels. The district does not plan to increase its fund balances to previous highs.
So since the district has emptied its rainy day fund, the assumption here is that district borrowing may now cost more. The rating did not change, just the outlook. You could take that to mean the district is on probation with Fitch.
According to Fitch the district needs you!
Going forward, the district will need to manage expenditures in line with enrollment and obtain support from its citizens for its capital funding needs in order to pass important overrides and bond initiatives.
Bet you will not see that on the district's website or in The Arizona Republic.
What do you suppose cures the ills of the CCUSD schools? You seem to advocate for more programs. You seem to not want any financial woes.
ReplyDeleteSince you avoid giving away your identity because you claim that many of your members have district ties, you must also believe yourself to have knowledge on where how the money works in our district.
So, do you propose cuts or redistribution of finances? If so, of what and where?
What issues do you think should be put in front of the electorate? How would you go about getting them passed given the apathy in the district's electorate? How do you get such wealthy people (as described in Fitch's article) to throw a few more pennies per dollar in the direction of our students.
honeymom
Good information. Fitch says the "district faces pressure from flattening enrollment, declining fund balances and a tax averse electorate."
ReplyDeleteHow could Fitch have possibly overlooked the impact of the curriculum? Sorry, couldn't resist.
I see the "tax adverse electorate" looming large in most of their reasoning for the downgrade.
Remind me again how your group is working to make the electorate less tax adverse?
I don't think most people would doubt that CCUSD has financial concerns.
ReplyDeleteProblems exist, but how to solve them? That is where there is room for lively debate.
Fitch says nothing about the quality of teaching/instruction in the district. The negativity is based on the problems of flat enrollment and the voters' aversion to almost any bond or override. That is not a curriculum based negativity, it's financial. Frankly, this blog looks only for negative in the district.
ReplyDeleteI do value the information provided as it's factual and non-biased.
ReplyDeleteBut for more factual/non-biased information visit Fitch directly: www.fitchratings.com
Since this watch is big on comparing CCUSD to other nearby districts, I'm surprised they didn't cite that data as well.
When I look, I don't see any positives (plus signs) for Scottdale, PV, or DV. What I do see are stable outlooks and many negative outlooks as well.
Makes it look like some wealthy local citizens too greedy to ante up a little more in taxes are too blame.
ReplyDeleteWhy not use this blog to push for support of bills that help raise revenue for the district so that you can get some of your curriculum wishes and help grow the reserve fund again? There is only so much water that can be squeezed from a stone and I would like my kids to be in class sizes that aren't too big to educate them in.
honeymom
Curious, did Dr. Ashby or the Board President ever respond to the CCUSDWatch on your laundry list of suggestions? And if so, what did they say?
ReplyDeleteLooks to me like a "negative" outlook from a well-respected institution like Fitch could be just what this district needs.
ReplyDeleteNow we have a goal, in couple of years why not get upgraded?
Nothing like a little kick in the pants to get things moving....
Hi SBRBaby,
ReplyDeleteI would guess that the district would require more movitvation than this.
Thanks for your post!