On the cusp of a $700,000 downgrade, Amherst Schools officials are confident they’ll keep their AA2 credit rating with Moody’s.
School board president Ron Yacabozzi led a delegation to the investment firm’s Chicago offices earlier this month to make a two-hour pitch, selling Moody’s on Amherst’s future.
“That was an incredible experience. I’ve made presentations before, but never like this one. This one was stressful,” he said Monday.
Yacabozzi, superintendent Steven Sayers, and treasurer Barbara Donohue made the trip in preparation to sell bonds for construction of a new PK-3 school on North Lake Street. The credit rating affects the amount of interest the district must service, which can swing by hundreds of thousands of dollars with each step up or down the credit ladder.
Amherst had been in danger of being demoted to a AA3 rating.
The envoys covered the district’s finances, of course — but investors also wanted to know the story of Amherst, residents’ attitudes, potential economic growth, medical facilities, and what kind of employers are located in the area.
“We had a good story to tell and we were very proud to go there,” said Donohue.
Yacabozzi said he covered everything from moving to Amherst at age 10 to the school system’s most recent five-year forecast. He said the verbal report “covered Amherst from head to toe. I don’t think we missed covering one rock.”
The Amherst Schools have AAA financial strength, he said. But Moody’s reps were concerned with the overall health of Lorain County, which they said will likely lock the district into its AA2 rating.
The district has never had to pitch to a credit firm before. In years past, Ohio school systems could simply buy an insurance policy that guaranteed a certain rating, but the rules have changed.
The bond rating analysts zeroed in on the Amherst Schools’ emergency levy renewal on the May 2 ballot, commenting on how crucial it is to the district’s financial future. First passed in 2012, the levy generates $2.67 million per year and re-upping it this spring will not increase taxes.
“We’re hoping that everyone gets out there next Tuesday and exercises their right to vote” and supports the school system, Sayers said.
It’s a primary election with an extremely short ballot — two Amherst issues and no candidates — so turnout will be much lower than for November’s presidential race. That increases the importance of each vote cast.
Donohue said the next step is to go the market.
A first round of bonds to finance school construction will be sold May 2, with the second sold May 18.
Anyone in the community can purchase bonds in increments of $5,000. Find more information at www.amherstk12.org.
Jason Hawk can be reached at 440-988-2801 or @EditorHawk on Twitter.