Belleville Schools’ Better Bond Rating May Benefit Taxpayers

BELLEVILLE, NJ — At first glance, it appears to be just a slight bump: an A-minus to an “A.” But according to Belleville school officials, a recent upgrade to the district’s outstanding bonds could also mean significant savings for local taxpayers.

S&P Global, an international rating agency for corporate and municipal debt, has raised the long-term rating on the Belleville Public School District’s outstanding bonds from A- to A.

Why is that important? According to administrators:

“The upgrade could result in the savings of taxpayer dollars, considering that the S&P credit rating represents the credit worthiness of corporate and government bonds and should reduce the school district’s borrowing costs. A higher bond rating typically allows the borrower to enjoy lower interest rates … The enhanced rating could benefit Belleville's taxpayers when the school district issues new bonds. The higher bond rating could also be leveraged to allow the district to refinance its outstanding debt for greater savings.”

Here’s how the S&P report explained the decision:

“The upgrade reflects our view of the district's maintenance of solid operating results, increasing fund balance, and improving economic metrics. The upgrade further reflects our opinion of the district's track record of several years of positive operating results and incremental and steady improvement in total fund balance, though we note that available reserves remain negative given the historical period of significant weakness. The district's economy has also shown modest improvement during the past few years, further supporting the higher rating.”

When Superintendent Richard Tomko arrived in February 2015, the district faced a $4.5 million deficit, borrowing money from the state to balance its spending. This deficit triggered the assignment of a state monitor to help address the district’s spiraling finances.

Things have come a long way since then, administrators said.

• See related article: Essex County's School Superintendent Of Year Is From Belleville

To help balance the budget, Tomko overhauled the school district’s financial operations with the support of the Board of Education and the state monitor, Thomas Egan.

“The mismanagement of funds by previous administrations negatively impacted the programs for students, facilities and the overall quality of academics,” Tomko said. “When the board supported the action plan that Mr. Egan and I presented when I first arrived, we knew we had a long road ahead to ensure the students in Belleville received an education that was second to no other in the state.”

According to school administrators, that plan included a capital improvement project to repair district infrastructure, a student-centered strategic plan, restructuring of the business office and transitioning to a new business administrator, Matthew Paladino.

More than $5 million in preschool expansion aid has been added to the budget, and several new sites have extended the district's physical footprint across Belleville. That includes a recent upgrade project to bring all of the district’s schools into compliance with the federal Americans with Disabilities Act.

• See related article: Belleville School District Finishes Long-Awaited ADA Renovations

Paladino and his staff in the business office said the latest bond upgrade was exciting news.

“We are fully committed to doing what’s best for the students, the property taxpayers and the entire Belleville community,” Paladino said. “It’s just about doing the right thing and working together to ensure our students are well-served.”

• See related article: Here's The 'Average' Property Tax Bill In Belleville, Nutley
• See related article: Belleville Town Budget Has Small Tax Hike For Homeowners

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