Manteca Unified, according to one of the leading analysts of financial performance, is “very strongly” positioned to meet financial commitments.
The ‘AA’ long-term financial viability rating bestowed by S&P Global after assessing the district’s operations and budgeting will more than likely translate into the lowest possible interest rate for the issuance of the first $65 million of bonds authorized when voters passed Measure “A” in November.
As such it means the payback of the first of the $260 million worth of bonds to be issued to modernize the district’s 33 campuses — a third of which are 50 years or older — will come in at a rate that will be below the voter authorized cost of $45 per $100,000 of assessed valuation.
The strong marks the district received is thanks to solid growth, district-level administrative stability, and fiscal management that were also responsible for the final sale two years ago of $159 million in Measure G bonds passed in 2014 costing only $37 per $100,000. The authorized cap was $60 per $100,000.
The bottom line for taxpayers is the payback of at least the initial $65 million in Measure A bonds will likely be closer to $37 per $100,000 than $45 per $100,000.
If that holds true through the sales of all of the Measure A bonds and growth continues at its current pace to keep generating more property to spread the repayment across, there is a strong possibility taxpayers will end up paying upwards of 20 percent less than the authorized cap.
The assessed value of property within the Manteca Unified School District is now closing in on $16 billion. It effectively means buyers of new homes — as well as those in a position to buy existing homes — will be shouldering a larger burden of repaying school bonds. Such buyers typically are the ones that have a large percentage of families with school-age children.
Assessed value is different than market value. An older home that hasn’t been sold in a number of years may have a market value of $350,000 but its assessed value is based on the price it last sold at plus a 2 percent annual cap on value increases under Proposition 13.
New home sales plus existing homes that are resold have their assessed value reset at the selling price.
Growth alone doesn’t assure strong financial ratings.
Besides strong property wealth indicators, S&P’s rating is based on MUSD’s:
*Stable enrollment and positive assessment of spending of state funds;
*Very strong fund balance;
*Good financial management.
S&P reports that MUSD’s 2022 fiscal budget reveals good financial management and balanced budget.
“We believe the district will maintain its strong financial position given the district’s conservative budgetary practices (and) intention to rebuild its available reserves in order to provide better budgetary flexibility,” S&P stated when conferring the “AA” rating.
As a result, S&P is saying that MUSD is using taxpayer funding wisely and effectively to support students and the learning environment. S&P, a world leading financial researcher, predicts that MUSD will maintain a stable financial outlook with current budgeting practices in place.
“We at MUSD have established the need to live within our means in a zero-sum environment— all budgeting plans and adjustments are based on student needs aligned to District target,” said Manteca Unified Superintendent Clark Burke. “We are honored that S&P has recognized our thoughtful planning to school budgeting.”
The “AA” rating tells potential buyers that the Manteca Unified bonds are investment grade with a “very strong capacity to meet financial commitments.”
The on higher rating on the S&P scale that has 10 possible ratings is “AAA”. That rating is for those institutions with an “extremely strong capacity to meet financial commitments.”
To contact Dennis Wyatt, email firstname.lastname@example.org