MONTROSE, N.Y. Hendrick Hudson School District has issued a response to the downgrade of $36.2 million in outstanding debt four days after a The Daily Cortlandt published an article detailing the Moodys release. The districts debt was downgraded from Aa3 to A1 by Moody's on Nov. 23.
District spokesman, Rick McCormack, wrote that the district was disappointed by the downgrade but it didnt come as a huge surprise, in a release issued Dec. 23, but dated Dec. 29. The school district addressed the downgrade 36 days after the debt was downgraded by Moodys.
The change is more a reflection of what is taking place economically on a state and federal level than it is about our financial health, wrote McCormack. The credit rating review was triggered by refinancing bonds issued to the district in 2003.
Moodys said some of the challenges for the district include falling property values, the financially constricting New York State 2 percent tax levy cap, increasing fixed costs and declining reserves. The only strength listed on the Moodys release was the districts relatively wealthy tax base.
The district said the downgrade has resulted in a 0.1 percent interest rate increase for borrowing costs, and that despite the downgrade, refinancing outstanding debt from 2003 will save the district about $630,000 over 10 years.
The same day Moodys notified us of the change, they notified 100-plus other agencies of similar changes in their credit rating. More importantly though, the actual change will have little impact on our day-to-day operations and finances. In fact, our recent refinancing came in the wake of the change and it resulted in just a 0.1 percent increase in our borrowing rate, wrote McCormack.
The district addressed the downgrade nine days after the overwhelming defeat of a $25.1 million bond referendum. The referendum was voted down nearly 2-to-1 on Dec. 14.
A call made to the district for further comment on the downgrade was not returned by Thursday evening.
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