Improved Credit Rating, Awards For Financial Reporting Cap Martin County School District's Fiscal Resurgence
After suffering some notable setbacks years ago, Martin County School District’s steady return to financial strength just earned significant validation.
Fitch—a leading global provider of independent credit ratings—recently announced revising its rating outlook for the district from “stable” to “positive.” It’s a major milestone in the district’s efforts to reestablish fiscal fortitude.
“We were in a very difficult financial position a few years ago,” says Laurie J. Gaylord, Martin County Superintendent of Schools. “But by working together, the district finance team and the school board have steadily improved things. It’s definitely been a long and challenging process, but this 'positive' Fitch rating confirms our return to fiscal strength—and that is exactly what Martin County taxpayers expect and deserve.”
Citing the district’s improved financial resilience, very low long-term liability burden and prospects for solid enrollment-driven revenue growth, Fitch acknowledged the district’s former poor financial prospects—which became apparent less than a month after Superintendent Gaylord first took office in December 2013.
“Reserves stabilized in recent years and increased considerably in fiscal 2016 following past accounting inaccuracies under a prior management team,” noted the Fitch report.
The Fitch rating follows two recent awards from national and international organizations recognizing the district’s excellence in its Comprehensive Annual Financial Report (CFAR) for fiscal year 2016, including:
- Certificate of Achievement for Excellence in Financial Reporting—the highest form of recognition in governmental accounting—from the Government Finance Officers Association, a Chicago-based organization that works with nearly 20,000 government officials across the country on finance policy and management.
- Certificate of Excellence in Financial Reporting from the Association of School Business Officials International, a 117-year-old international organization committed to advancing the highest standards of school business management.
“As you might imagine these financial reports are very complex,’” adds Gaylord. “Our finance team deserves a lot of credit for consistently producing these difficult reports with precision and keen attention to every last detail. But for the team to do so in a fashion that earns awards from organizations as esteemed as the Government Finance Officers Association and the Association of School Business Officials is a tremendous achievement.”
Road to Fiscal Recovery
Just a few years ago, Martin County School District faced difficult financial circumstances. In December 2013, Standard & Poor's Ratings Services lowered its issuer credit rating on Martin County School District from an A+ to an A- with a negative outlook, citing “decreased reserve levels,” a “weakened financial performance” and “challenges to generate positive operating results and rebuild reserves.”
Rebuild is exactly what the Martin County School District did, tightening its budget, cutting spending wherever possible and reestablishing its reserves.
Signs of a comeback emerged the following year. In August 2014, Fitch raised the district’s rating to an A, but the outlook remained negative as concerns lingered over the “district’s inability to regain structural balance.”
In June 2015, the rating remained at an A and the outlook improved to “stable” reflecting the district’s “cost-saving measures taken in fiscal 2015” which were projected to “maintain adequate reserve levels through improved operations, despite state funding challenges.”
Photo courtesy of Martin County School District