FARMINGTON — Davis School District has moved from an Aa2 bond rating to an Aa1 rating, as measured by Moody’s Investor’s Service. This upgrade could mean lower interest rates on school bonds and lower costs for taxpayers, according to a district press release.
Bond ratings measure the likelihood that a financial obligation will be repaid. The higher the rating, the higher the likelihood.
An Aa1 rating is at the top of Moody’s Aa category, only one upgrade away from Moody’s highest category, Aaa.
“Now that we are upgraded, we are one step away from an Aaa rating, so we are viewed as a really good investment,” said Craig Carter, business administrator for the district, in a press release. “Because of the upgrade, we anticipate lower interest on our bonds, which means savings to the taxpayer.”
The district had its previous rating, Aa2, for a decade. The Davis School District Board of Education made it a goal to increase the district’s bond rating in December 2009.
An improving economy in Davis County is one reason for the upgrade, coupled with the district’s increasing fund balances, Carter said in the release.
“As a board, we’ve been diligently involved since then to improve our bond rating,” said John Robinson, president of the district’s board, in the release. “Secondly, the district only bonds for what we need at the time. Our conservative approach, along with a rating upgrade, will end up saving taxpayers of the county hundreds of thousands of dollars in the future.”
The $298 million bond the district issued in 2015 has been used to build Farmington High School, Shoreline Junior High in Layton, a new elementary school in West Layton and a rebuild of West Bountiful Elementary. Remodels of Viewmont High, Woods Cross High, Mountain High and Mueller Park Junior High have also been funded by the bond.
Even before the upgrade, Davis School bonds were considered a safe investment.
Bonds with an Aa rating are “judged to be of high quality and very low credit risk,” according the Moody’s website. There are three groups within the Aa category, Aa1, Aa2 and Aa3.
The district’s previous rating of Aa2 indicated that it was in the middle of the pool of all obligations rated Aa. Now with an Aa1 rating, it’s in the highest end of the category.