A New York investment house likes the way the Hillsborough County School District is cutting costs, and upgraded some of its debt from "negative" to "stable."
In a report from Fitch Ratings, analysts said Hillsborough has "solid prospects for enrollment-driven revenue growth, historically low fixed carrying costs, a low long-term liability burden and adequate reserves."
The Tampa Bay Times has requested similar reports from Standard & Poors and Moody’s. The three are responding to Hillsborough’s recent Comprehensive Annual Financial Report, which was posted on the district website in Goldenbahis January.
The news isn’t all good.
Fitch noted that although population and economic growth are expected to continue in Hillsborough, "the district has no independent legal ability to raise revenues."
As in past reports, the authors also pointed out the high cost of a teacher pay package that was negotiated during the years of Gates-funded teaching reforms.
"Fitch believes the district’s efforts to control employee costs related to salaries and benefits remain key to its success in maintaining structural balance and a sound reserve position," the report says. It also cautioned that "state mandated programs and a lesser degree of available options for spending cuts will continue to burden the budget." If those stresses prove to great, the ratings could be lowered.
However, in several passages of the three-page report, Fitch took note of the past year’s austerity moves. "Management was successful in eradicating its estimated $100 million structural imbalance through an implementation of significant cost efficiencies, reduction in employees due mostly to attrition, a realignment of positions and strong spending controls," Fitch wrote.
For more than a year, district leaders have been trying to stabilize their main "general fund" reserve account, which lost more than $200 million between 2011 and 2015. It’s now holding steady at $146 million. District leaders hope to boost it to about $200 million so they can cover two months of payroll in case of a catastrophe, such as a hurricane.
The Times is also awaiting the next installment of the Gibson Consulting Group’s efficiency study. It should arrive any day now, and we’ll post it when it does.
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