Financial Accountability: Two Independent Ratings on School District Finances

Moody’s and Auditors Give Cambridge-Isanti Schools Favorable Evaluation

(Cambridge, Minnesota, February 9, 2022) — Administrators at Cambridge-Isanti Schools received their own financial “report cards” in January — earning good marks from two independent evaluators: Moody’s Investor Service and the independent public accounting firm of Malloy, Montague, Karnowski, Radosevich & Co. The auditors issued a clean audit on financial statements. Moody’s updated the District’s bond rating — similar to raising an individual’s credit score. 

At the January School Board meeting, the School Board heard from the district’s independent auditors, Malloy, Montague, Karnowski, Radosevich & Co. Auditors found no material weaknesses or deficiencies and issued a “clean” Annual Financial Audit. The auditors noted the District’s conservative budget practices. 

“We are committed to living within our means,” Finance Director Chris Kampa said. “This is a matter of public trust. We will use the resources provided to us wisely, and we will not overspend. The past few years have been challenging because before we gained support for a local referendum, we were among the lowest spending school districts in Minnesota (bottom 7%). (Today we remain below the state average.) The audit for FY 2021 reflects painful budget reductions in 2019, 2020 and 2021 that cut our workforce, eliminated services and raised class sizes. But — we stayed within our budget.”

Better credit score

The District’s fiscally responsible budgeting practices also received a nod from Moody’s Investors Service. On January 13, 2022, Moody’s updated the district’s bond rating removing the “negative outlook” changing the outlook to “stable.” They cited prudent fiscal management, improved cash and fund balance, and growing enrollment. Moody’s stated the “[district] restored cash and fund balance after several years of decline and will likely stabilize at the improved levels because of its conservative budgeting practices.” 

Why is a bond or credit rating important? 

Leading up to last November’s operating referendum, the School Board promised taxpayers they would refinance some existing debt to lower the tax impact on the referendum. When it came time to do so, the bond agencies reevaluated the district’s financial position and rewarded the District with a stronger credit rating.

For a school district, a better credit rating means: 

• Lower interest rates on refinancing existing debt — a savings for taxpayers. 
• Lower estimated tax impact of the District’s referendum as a result of the savings.
• Lower costs for future capital projects and long-term maintenance projects, like replacing old boiler systems that are beyond their useful life. Lower costs mean you can do more repairs with less money.

The referendum tax impact will be less than expected

Taxpayers also will see the benefit of the stronger credit rating. The projected tax impact of the district’s 2021 referendum was estimated to be $12 per month on a property valued at $200,000. With economic growth in the community and the district’s improved credit rating, the cost of the referendum will be less for property owners — it is now projected to be $8.75 per month on a property valued at $200,000 (25% less than expected) depending on property valuations. 

“The important thing for community members to know is that we are doing everything we can to live within our means, mitigate tax impact and provide an outstanding education for students,” said Superintendent Nate Rudolph. “Every Student. Every Day. Our students, families and staff have been through a lot over the last two years of the pandemic. With our communities’ support, we are focused on meeting their needs and ensuring students are well prepared to be respectful, responsible contributing members of our community for decades to come.”

The District’s Financial Statements and Audit Report are posted to the district’s budget website under FY2021 www.c-ischools.org/budget

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Contact: Chris Kampa, Director of Finance and Operations | ckampa@c-ischools.org