The Sheboygan Area School District (SASD) is proud to announce that its Moody’s Rating has recently been upgraded to Aa1 from Aa2. As a result, SASD property taxpayers will save over $16 million on the financing of the referendum projects due to a lower-than-anticipated interest rate.

On Tuesday, December 10, the SASD was informed that the interest rate for the initial referendum borrowing in the amount of $92,000,000 came in at 3.78%, which was lower than projected. This rate reduces the original estimated interest expense and tax levy of the total $114,000,0000 referendum borrowing by $16,032,636 over the life of the loan.

Moody’s Ratings is a bond credit rating business, and Moody’s credit rating is important because it reflects the district’s financial health and creditworthiness. In the Moody's Rating system, securities are assigned a rating from Aaa to C, with Aaa being the highest quality and C the lowest quality. At Aa1, the SASD is near the very top of the Moody’s Ratings scale.

Of the 164 ratings assigned by Moody's to public school districts in Wisconsin, only 12 other districts are rated Aa1 or better. By comparison, the Aa1 rating is two ratings higher than the median rating of Aa3 for US school districts.

Following the successful referendum on November 5, 2024, the SASD has moved forward with the financing of $114 million to rebuild and remodel Urban and Farnsworth Middle Schools on their existing sites.

“This is great news for our local taxpayers,” said SASD Superintendent Dr. Jacob Konrath. “The Aa1 rating is a vote of confidence from a reputable rating agency regarding our district finances; however, it also accounts for less-than-expected enrollment declines compared to the national averages, strong student retention initiatives, and residential and industry growth. It’s a sign of a strong district and a strong community. It’s a good indication of the school and community partnership that continues to benefit students and taxpayers alike.”

School districts participate in ratings calls with Moody’s in preparation for borrowing funds. The last time SASD participated in a ratings call was in early January of 2017 when the district borrowed for multiple building projects, which was approved by voters in the November 2016 referendum. At the time, SASD maintained the Aa2 rating.

According to Moody’s, the upgrade to Aa1 is driven by a consistently stable financial position supported by strong budgeting practices, and relatively low debt. The Aa1 rating reflects the district’s strong financial position, with fund balance and cash ratios consistently above 30%.