Sound Fiscal Management Equals Savings for Pasco School District Taxpayers
Pasco School District was awarded the Aa3 rating by Moody’s Investor Service last month, one of the largest credit rating organizations in the country, which has led to savings for Pasco taxpayers.
The credit rating, much like a personal credit score, is based on the District’s effective financial management, the general economy of the state and nation, and community demographics. The highest rating available from Moody’s is Aaa.
Working with underwriter Seattle Northwest Securities Corp., Pasco made their bonds available at 6:15 a.m. on April 30 and they sold within a couple of hours. “There was so much interest in our bonds that they were oversold, meaning we had more buyers than we had bonds,” says Superintendent Saundra Hill. “That meant we could tighten up on the rates so that some buyers would drop out.”
Interest rates were much more attractive, thanks to Pasco’s new rating. The lower interest rate translates into lower tax rates for Pasco residents.
Impact fees also reduced the amount of the bond sales. Pasco voters approved sales of $46.8 million in bonds, but just $45.6 million were purchased. This reduction was accomplished by application of the impact fees collected to date to reduce the cost for all taxpayers. This represented a cost savings of $1.25 million for taxpayers.