Sep 20, 2016 2 min read

The Moody’s credit rating agency revised Trinity Area School District’s outlook from negative to stable.

The stable outlook reflects the district’s improved financial position resulting from efforts to balance its financial operations, and modest growth in its fund balance.

Moody’s affirmed Trinity’s general obligation underlying rating of Baa1 and enhanced rating of A3, which are classified as “investment grade.”

Moody’s said the Baa1 underlying rating reflects the district’s “very slim but stabilizing reserve position after years of structural imbalance.”

The rating also reflects the district’s “moderately sized and growing tax base, above-average wealth indicators and elevated debt burden.”

Moody’s noted a continued trend of balanced operations leading to a material growth in Trinity’s fund balance could result in a ratings upgrade.

“It is a step in the right direction and it’s encouraging,” said David Roussos, Trinity director of fiscal services.

In April 2015, 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 in conjunction with the issuance of $21.1 million 2015 general obligation bonds.

The lowered rating, according to Moody’s, resulted from 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.”

The district took corrective action and put a plan in place to return to and maintain balanced operations.

The scores given by credit rating agencies can affect a city or school district’s ability to borrow money, and, in general, those with higher bond ratings can borrow more easily and at lower interest rates.