MAHTOMEDI, MN - Mahtomedi Public Schools received a regulatory disclosure and financial downgrade from a AA to AA- in March from Standard & Poor's and was placed on a negative credit watch. The outcome of this action on the local property taxpayers and student programming could yield to the school district financing lower quality bonds at a higher price, due to the increased risk and Mahtomedi Public Schools financial ability to pay back. Because of the higher bond payback amounts, this will be less funding to go to education of students.
Mahtomedi Public Schools Carries Worst Financial Credit Rating In Comparison to Neighboring School Districts
Standard & Poors rates Mahtomedi Public Schools at a "AA- and Negative Outlook. Here are how neighbor school districts that are rated by Standard & Poors compared:
Forest Lake Public Schools - AAA rated, Stable Outlook
Centennial Public Schools - AAA rated, Stable Outlook
White Bear Lake Area Public Schools - AAA rated, Stable Outlook
Mounds View Area Public Schools- AAA rated, Stable Outlook
Stillwater Area Public Schools - AAA rated, Stable Outlook
Mahtomedi Public Schools has been quiet about the financial downgrade and it has not been presented for a public discussion at any regular school board meeting, or contained in any of the marketing materials put out by the school district for public review, such as "The Globe," or announced in the school district's legal newspaper, White Bear Press. Alternatively, the school district has been posturing the opposite, at Mahtomedi Public Schools May Regular School Board Meeting, the administrators and school board gave themselves kudos for receiving the CAFR "Certified Annual Financial Reporting" Award from the "ASBO" Association of School Business Officials International (an award that required prepayment by the school district of $985 to $1300). Neighbor School District, Stillwater Area Public Schools, also applied and received the CAFR award. The ASBO did not disclose how many Minnesota School Districts overall applied. Concurrently at the same time Mahtomedi Public Schools was receiving a financial downgrade from Standard & Poors, School Board Member Kevin Donovan boasted publicly about the financial reporting award at the school board meeting:
According to the March 28th, 2019 Press Release by Standard & Poors:
"The downgrade reflects the district's reserves falling below management's target, reserves falling out of line with those of similarly rated peers, and a structural budget gap that is still persisting into the 2019 projected results," said S&P Global Ratings credit analyst Joseph Vodziak. The negative outlook reflects our view that there is at least a one-in-three chance of a lower rating if the fiscal 2019 projected deficit is materially larger than currently projected; or if the district fails to regain structural balance in the 2020 budget. The 'AA-' underlying rating reflects our opinion of the district's: Participation in the broad and diverse Minneapolis and St. Paul metropolitan statistical area economy; Very strong income indicators and extremely strong per capita market values; and fairly rapid debt amortization. Offsetting the above strengths is the district's reduced available fund balance and its moderate-to-high debt burden."