Oof, that last paragraph in the quote from Moodys says it all ...
Back when the lease certificates were being issued and the administration was carrying on about the District's credit rating, I asked Obafemi how it could have a great credit rating given that they were talking about a structural deficit even then. He said it was based primarily on how efficient the District was in realizing tax revenue and since the District was close to 100%, it would take a lot to see a downgrade.
Jeff Hirsch got ahold of them and they admitted that the, still rosy rating, is predicated upon the strength of the community: “The Aa3 issuer rating,” Moody’s says, “reflects the district’s strong economy….”. If this was Harvey’s school district it would be a very different rating. Indeed, I wouldn't be surprised if their district wasn't in better, stand-alone, financial shape. Implicit in Moody's evaluation is that the people of Evanston will step in and absorb the $328M, and counting, shortfall. Despite what Moody's listed, the debt balance should formally be, $99M in prior debt + $40M in lease certificates. Add to that the $188M in deferred maintenance (every CFO I’ve spoken with would definitively consider this a very expensive and ill-advised form of debt; it’s an explicit obligation) and D65 is in a $328M hole that’s growing rapidly. The most recent slides from D65 CFO project these shortfalls to start accelerating in upcoming years with expected shortfalls of $19M, $24M and $29M for FY’26-28 and this is BEFORE counting the Capital Expenses and added Debt service of the proposed Foster School. In an environment of proposed school closures, teacher layoffs, and serious financial distress, D65 is in no position to be thinking about a new school. Then again, it’s decisions like this that got them into this financial mess in the first place.
Oof, that last paragraph in the quote from Moodys says it all ...
Back when the lease certificates were being issued and the administration was carrying on about the District's credit rating, I asked Obafemi how it could have a great credit rating given that they were talking about a structural deficit even then. He said it was based primarily on how efficient the District was in realizing tax revenue and since the District was close to 100%, it would take a lot to see a downgrade.
Guess that bridge has been crossed ....
Congrats, Sergio, Biz, Mya, Soo, Joey, Donna, and Omar!
More credit worthy than Cook County/ City of Chicago—well, now I feel way better!
😣😖😫
City of Chicago is now "speculative" grade. I'd probably rather own some random crypto coin at this point than Chicago debt
Jeff Hirsch got ahold of them and they admitted that the, still rosy rating, is predicated upon the strength of the community: “The Aa3 issuer rating,” Moody’s says, “reflects the district’s strong economy….”. If this was Harvey’s school district it would be a very different rating. Indeed, I wouldn't be surprised if their district wasn't in better, stand-alone, financial shape. Implicit in Moody's evaluation is that the people of Evanston will step in and absorb the $328M, and counting, shortfall. Despite what Moody's listed, the debt balance should formally be, $99M in prior debt + $40M in lease certificates. Add to that the $188M in deferred maintenance (every CFO I’ve spoken with would definitively consider this a very expensive and ill-advised form of debt; it’s an explicit obligation) and D65 is in a $328M hole that’s growing rapidly. The most recent slides from D65 CFO project these shortfalls to start accelerating in upcoming years with expected shortfalls of $19M, $24M and $29M for FY’26-28 and this is BEFORE counting the Capital Expenses and added Debt service of the proposed Foster School. In an environment of proposed school closures, teacher layoffs, and serious financial distress, D65 is in no position to be thinking about a new school. Then again, it’s decisions like this that got them into this financial mess in the first place.
Meanwhile, in Decatur…
https://decaturish.com/2024/12/outgoing-dekalb-school-board-member-anna-hill-confirms-200-million-shortfall/
Oh yea he is doing it all again down there, literally the same playbook
Maybe he will propose lease certificates too.
Yah but we got more administrators and consultants than any other district so that at least rates an A+++
Yay…