The Sag Harbor Union Free School District has received an upgrade in its credit rating, which in turn will yield positive results when the district applies for bonds and other types of borrowing in the future, Business Administrator John O’Keefe announced Tuesday night.
The credit rating, given by the agency Moody’s Investors Service, upgraded from A1 to Aa3. At the district’s Board of Education meeting May 27, Mr. O’Keefe said the upgrade will save the district money via lower interest rates when it borrows.
According to a press release from the school district, Moody’s Investor Service upgraded the district because it believed Sag Harbor School District had been successful in its financial management practices over the years. The new rating is also based on the district’s tax base, low debt burden and support for property tax increases. The upgrade went into effect immediately.
“I am very pleased they determined it was appropriate to upgrade our district’s credit rating,” Mr. O’Keefe said of the investor service.
District administrators applauded Mr. O’Keefe for working closely with Moody’s to get the new rating.
“This is just a wonderful example of a job well done,” said Interim Superintendent Dr. Carl Bonuso.
The upgrade will be beneficial to the district as it begins to borrow money to support the work of an approved $9 million bond for capital improvements. According to the press release, the district now may be able to save $330,000 in interest and approximately $15,000 in bond insurance premiums, thanks to the Aa3 rating. Savings during the annual tax anticipation note borrowing are also expected.
School Board President Theresa Samot said the rating upgrade is a testament to Sag Harbor’s successful financial responsibility.
“This unprecedented increase in our district’s credit rating confirms our commitment to provide the best quality education to all students while remaining mindful of our promise to taxpayers to be fiscally prudent and responsible,” she said.