By Tessa Raebeck
In a move that will result in hundreds of thousands of dollars in savings for taxpayers, the Sag Harbor School District has been upgraded by Moody’s Investors Services from a single-A credit rating to double-A status.
“This significant upgrade is based upon the district’s strong, successful financial management practices over the past several years, which have resulted in both improved and satisfactory reserve levels,” the district said in a press release.
Each year, Moody’s checks in on the district as it enters budget season. The district borrows money annually for its cash flow purposes called TANs (tax anticipation notes) and has historically held a single A1 rating for borrowing, with the potential to advance to a double Aa3 rating.
School Business Administrator John O’Keefe decided to spearhead the effort to advance the district’s rating.
“I moved forward with the process because I felt over the last few years, the district has made some great strides,” Mr. O’Keefe said at a school board meeting May 27.
“We were successful,” he added. “We moved out of a single rating—which is the rating the district has always held since its graded history—we moved to a double rating, effective immediately.”
As a result of this upgrade, the district anticipates saving approximately $330,000 in interest for the work proposed in the $9 million capital projects bond voters approved last fall, as well as approximately $15,000 in bond insurance premiums. Additional money is expected to be saved during the annual TAN borrowing.
“It’s not very common,” Mr. O’Keefe said of the upgrade. “Especially to move in this fiscal climate where districts are getting tighter and tighter with the tax cap, it’s more common to move the other way.”
“Really, that’s work for children, because that kind of money can be freed up for programs and for important things,” added school board member David Diskin.