Fitch Ratings has affirmed the Natomas Unified School District’s general obligation bonds are holding at a BBB rating.
The district continues to have a negative outlook rating because:
- While the district’s general fund balances are currently strong, they are vulnerable to significant reduction in the next two fiscal years.
- The district continues to experience significant cash flow pressure which could result in needing a state emergency appropriation loan in fiscal 2013.
- This financial pressure results from significant declines in student enrolment due largely to strong charter school competition, limited spending flexibility, and a difficult state funding environment.
- Labor concessions in fiscal years 2011 and 2012 provide important budgetary relief, but more are needed, in addition to improvement in the state education funding situation, to alleviate the immediate need for a state loan.
- Turnover in top management has been high, and the district is facing yet another change as the superintendent is leaving after one year in the position due to concern about a state takeover; the majority of the assistant superintendent positions will have new occupants in fiscal 2012.
- The district’s socio-economic characteristics are below-average, the district has experienced significant taxable assessed valuation (TAV) declines, and further development is currently hindered by a flood plain moratorium that is expected to be lifted at the end of 2012.
A downgrade of the Natomas district’s general obligation bonds could be triggered by the need for a state emergency appropriation loan which would add to the district’s existing debt burden and require repayments from the general fund that could crowd out other spending.
Read more here.
Clearly, this report by fitch is not objective, as it is based on information that the district reports out for public consumption such as flawed and unreasonably conservative projections and unsubstansiated assumptions that show how inaccurate and non-transparent the district is and has been behaving, for many years now. Why should we believe anything this board and outgoing financial manager have to say? Do we consider these successful people? Does anyone, including the county, think these people manage well? I think we all know the real truth based on our own experience here in Natomas.
“This financial pressure results from significant declines in student enrolment due largely to strong charter school competition, limited spending flexibility, and a difficult state funding environment.”
CORRECTION: Parents are choosing private schools,home schooling, and charter schools over class sizes of 32 in Kindergarten or failing high schools.