NAMPA — A national bond-rating agency has upgraded its financial outlook for the Nampa School District from negative to stable and held the districts bond rating steady.
The stable rating outlook reflects our expectation that district finances will gradually recover, starting in FY14, as a result of management's corrective actions which are expected to result in an operating surplus and a slightly positive reserve balance for the fiscal year ending June 30, 2014, Moodys stated in its opinion issued Tuesday.
Moodys held the districts bond rating steady at Baa3. During the districts financial crisis, the agency had downgraded the districts bond rating.
Affirmation of the Baa3 rating primarily reflects the district's very weak financial position through FY13, mitigated in part by recent unaudited evidence of financial improvement in FY14, Moodys reported.
Weve made significant progress toward implementing our plan to restore financial stability, so I am pleased to see the negative outlook change to reflect our improvements, said Superintendent Pete Koehler in a press release. Thanks in large part to our communitys support, the district has eliminated its deficit. We also brought spending into line with revenue through difficult cuts. We are stable and during the next three to five years the district should fully recover.
In August 2012, the district discovered it ended the 2011-12 school year with a deficit. The deficit was the result of budgeting errors and lack of oversight and the individuals responsible left the district. When the deficit was discovered, the district had already committed to contracts in the 2012-13 school year. While the district was able to cut some spending during 2012-13, the deficit grew to $5.3 million by June 30, 2013, according to information provided by the district.
In the 2013-14 school year, the district took major steps to restore financial stability. The deficit was eliminated primarily through revenue from the sale of unused property and a one-time supplemental levy/bond restructure approved in March 2013 as well as spending cuts. The district brought spending into line with revenue by cutting 14 days from the school calendar, leaving teaching positions unfilled, reducing busing service, closing a school, and making other cuts. The district anticipates ending the 2013-14 school year with a small surplus.
For the 2014-15 school year, the administration is proposing a balanced budget that includes continuing to rebuild the districts fund balance. The 14 days cut from the calendar and 25 teaching positions will be restored thanks to voter approval of a March 2014 supplemental levy, which provides about $3.4 million for the next two years.