Robbinsdale Schools’ Credit Rating Drops as Board Approves Debt Plan
The credit rating for Robbinsdale Area Schools recently took a hit as the school board approved its state-mandated statutory operating debt plan.
This comes on the heels of the district’s decision to shutter or repurpose four of its schools and its administrative building.
S&P Global Ratings dropped the district’s credit rating to BBB-, the lowest of its investment-grade ratings. That’s a downgrade from its previous BBB rating and likely means the district will have pay higher interest rates when borrowing money.
It’s the second time in recent years that S&P lowered the district’s rating.
According to Kristen Hoheisel, the district’s chief financial officer, S&P cited the district’s $21 million budgeting error and recent compensation increases for district employees as reasons for the drop. The budgeting error occurred before Hoheisel and current Superintendent Teri Staloch took over.
“[S&P Global Ratings] attributed the recent history of deteriorating operations to unrealistic budget assumptions and lack of structural adjustment in response to continuous enrollment declines,”Hoheisel said.
If the district’s financial position improves, S&P could consider giving them a positive rating action over time, Hoheisel said.
Statutory Operating Debt Plan
The Robbinsdale School Board approved its state-mandated statutory operating debt plan at its Jan. 20 meeting.
It details the district’s plans to cut nearly $8 million from its annual budget. It also finalizes plans for school closures.
The vote to approve the plan was 5-2 with Board Members Caroline Long and Helen Bassett dissenting.
With schools closing, the board approved new boundary lines for students attending Sonnesyn and Noble elementary schools, Robbinsdale Middle School, Fair School Crystal and PMS Spanish Immersion. Those changes are available on the district’s website.
Brooklyn Center | Brooklyn Park | Crystal | Golden Valley | New Hope | Plymouth | Robbinsdale
