Moody's Downgrades Bedford Central's Bond Rating

Moody’s Investor Service recently downgraded the Bedford Central School District’s bond rating to Aa2.

That’s still Moody’s third highest rating. However, Moody’s also issued a negative outlook.

Officials were not surprised. When the Board of Education again decided to use district reserves to keep the annual budget below the state’s mandated tax cap while maintaining the program, they said this could happen.

“Higher bond interest costs translate into higher budget costs over the long term,” district officials acknowledged in a Q&A on the website. “Efforts need to be made to stick to our plans to balance our budgets and maintain healthy fund balances in order to maintain high Bond ratings.”

The trustees must always balance the students’ needs against the community’s tolerance for tax increases, they said. The 2015-16 $127.2 million spending plan increased spending by only .55 percent over the previous year.

District officials vowed to remain “focused on continued academic success for students with programs and outcomes our community expects and on structural changes to balance expenditures with revenues without reliance on fund balances.”

School district often use reserves, or fund balances, to offset increased spending and keep tax rate increases low and steady.

Bedford’s multi-year fiscal plan calls for one more year of digging deep into the fund balance to offset operating expenses; and, after that, limiting yearly spending to annual revenues:

“Our plan calls for continued use of fund balance for one more year along with two more years of significant, sustainable budget reductions. That will get us structurally balanced if we are able to maximize the tax levy at least at the cap level.”

Also, they said, they expect the Moody’s rating will only slightly affect upcoming borrowing costs and will have “no material impact on upcoming District budgets.”