Schools

Moody's Rates District on $78M Bond

In its financial rating of the $78 million Bensalem High School renovation, a leading ratings agency said the school district had 'strong financial management practices.'

Citing the Bensalem Township School District's "healthy reserve levels" and "improved financial management practices," Moody's assigned the district's $78 million renovation project at Bensalem High School a Aa2 rating.

"The Aa2 rating reflects extremely strong financial management practices and consistent budgeting leading to large reserve levels and stable operations," Moody's wrote in its decision. "It also reflects a large tax base, with an average socio-demographic profile, and modest debt burden."

Ratings help determine interest rates for borrowing, such as the bond that the school board is expected to take out to finance the high school's renovation project. 

During a committee meeting last week, school board president Ralph Douglass said a special meeting would be held on Nov. 13 to "deal with the bond issue."

Superintendent David Baugh said he had a "great call with Moody's" and said it was "very positive."

Even though a district official told Patch previously that Bensalem would stay within the Act 1 index–which for the coming year amounts to a maximum 2.1 percent tax hike–Moody's notes that the district is not obligated to limit its tax increase to fund the school renovation. 

Moody's writes that the bonds are secured as part of the district's "general obligation unlimited tax pledge," which is "not subject to Special Session Act 1 (Taxpayer Relief Act) limitations."

In assessing the district's rating, Moody's listed as weaknesses "lower wealth levels" as compared to peers and a "comparatively weak tax base."

Improvements in wealth levels and stabilization of property values could move the rating up, according to Moody's, while a "depletion of reserves" and "continued weakness in property values" could move the rating down.

Given that Bensalem residents will have at least three new board members come January, do you think the decision to spend $78 million on renovations should wait until the new nine-member board is in place? Tell us in the comments.

Find out what's happening in Bensalemwith free, real-time updates from Patch.


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here