Moody’s Investors Service, a credit-rating agency, issued an Aa2 rating to the Commack Union Free School District Monday.
The Aa2 rating reflects sound financial operations with a satisfactory reserve position.
The ratings play a critical role in determining how much interest the district has to pay on its issued debt. According to Moody’s, proceeds from this issuance will finance various district-wide capital improvement projects through bonds.
The agency stated that Commack’s strengths include conservative budgetary practices and financial management, sufficient financial flexibility with satisfactory reserves and a substantial tax base with above-average demographic profile.
Challenges the district faces include a 2 percent tax cap, a tax base decline and limited new growth and development opportunities due to tax base maturity.
As a result of the rating, the district refinanced $47.5 million in general obligation serial bonds at a lower interest rate. Superintendent Donald James said that doing so, will save the District nearly $1 million over the next two years and more than $3 million over the life of the bonds.
The Superintendent also recommended that these funds be utilized to lower future tax-levy increases beginning with the 2013-2014 budget.
“These savings will help us keep taxes well within the State mandated tax-levy cap for 2013-2014 and support the continuation of our outstanding programs," he said.