The Reading Community School District's commitment to strong fiscal management has yielded significant financial benefits, most notably reflected in an upgraded credit rating from Moody's Investors Service. This improvement not only highlights the district's commitment to strong fiscal management but also will directly translate to cost savings for residents.
Recently, Moody's upgraded the district's credit rating for general obligation unlimited tax bonds to Aa3. This upgrade is a result of the district's management, an appreciating tax base, and its low fixed costs. As of June 30, 2024, the district holds $25 million in outstanding debt, but with reserves approaching 70% of revenue and projected surpluses for fiscal years 2024, 2025, and 2026, the financial outlook remains positive.
The Aa3 issuer rating is particularly noteworthy, as it places the district just three steps away from the highest possible rating. This elevated credit status is rare among school districts nationwide and demonstrates the district's sound financial stewardship.
With the improved credit rating, the district can secure lower interest rates, which could result in substantial cost savings for the district and taxpayers. The district is actively working to refinance the bonds by the end year of the year. These savings will ultimately reduce the financial burden on residents by reducing tax rates in the coming years. Once that is complete, we will have more specifics on taxpayer savings resulting from the credit rating update when bonds are refunded at a lower interest rate.
Moreover, the district's prudent financial management extends beyond debt and credit ratings. Since 2021, the district's careful investment of public funds has generated $1.3 million in interest revenue. This additional revenue stream is the result of strategic investments designed to prioritize the safety and liquidity of funds while maximizing returns.
Jennifer Burke, District Treasurer, emphasizes the importance of transparency in achieving these milestones: "Transparency is at the heart of our financial strategy. By openly sharing our financial practices and maintaining clear communication with the community, we aim to build trust and make informed decisions that benefit everyone. This upgraded credit rating is a direct result of that commitment, and it underscores our dedication to managing the district's resources responsibly."