Trinity restructures bond debt
Trinity Area School Board Thursday unanimously approved restructuring $21 million of long-term bond debt to help alleviate its precarious financial condition.
The move extends the bond payments through 2032, an additional nine years. Director of fiscal services David Roussos said the restructuring will result in the school district paying about $1.8 million less in debt service for the 2015-16 school year.
The board implemented several strategies recently to balance the 2015-16 budget, including receiving a tax exemption for 2015-16 that will result in a 4.7-mill tax increase and eliminating positions through attrition. Superintendent Michael Lucas and Assistant Superintendent Donald Snoke Thursday volunteered to forgo their raises, estimated at about $13,000 for both for the 2015-16 school year, a decision that was approved unanimously by the school board.
The restructuring vote occurred on the same day Moody’s Investors Service announced it reduced its rating on the Trinity Area School District debt.
Moody’s downgraded the general obligation rating to Baa1, from A2. In addition, Moody’s assigned a Baa1 underlying rating and an A2 enhanced rating with a negative outlook to the $21.1 million 2015 general obligation bonds.
The lowered rating, according to Moody’s, reflects the district’s “narrow financial position following several consecutive years of reserve draws and the use of one-time measures to alleviate near-term budgetary pressures.”
Moody’s said the negative outlook on both the underlying and enhanced ratings reflects the “possibility for further credit deterioration should the district be unable to restore structurally balanced operations without the use of one-time revenues.”
Rising costs for pension and school operations also challenge the district, according to Moody’s.
Moody’s downgraded the general obligation rating of Trinity from A2 to A1 in April 2014.
“Unfortunately, we were downgraded again. I think it’s important to note that not only Cypher & Cypher and not only our internal audits, but also Moody’s has indicated we find ourselves in this situation because taxes were not raised for a number of years,” said Lucas.
Roussos said the downgrade was expected, but the district has taken corrective action and “has a solid plan in place” to return to and maintain structurally balanced operations.
Also, Trinity resident Janine Turturice, a parent of children in the middle school band program, asked the school board to reverse its decision to eliminate positions through attrition, which results in the combining of the seventh- and eighth-grade bands and eliminates swimming instruction at the middle school during the day.
“My daughter never had a private music lesson. Everything she learned, she learned here. Music and her music education have given her the opportunity to find her voice and to develop as a leader,” said Turturice. “It’s intrinsic benefits like that that come out of music education that need to be considered here.”
Snoke addressed the restructuring of the middle school music program and other departments. He said the district faced difficult options: either not filling positions through attrition and working to meet students’ needs, or cutting a program and laying off employees.
“I don’t think anybody wants to do either of them, but of the choices, obviously not filling through attrition seems to be the most palatable,” said Snoke.
He also said swimming instruction has been eliminated during the day, but swimming will be offered during students’ power block sessions.
In other business, the board unanimously appointed Gregory Rudman to the school board. Rudman will fill the seat formerly held by Henry Clemens, who recently resigned. Rudman will represent Canton Township. His term is set to end in December.