MCS officials travel to New York City in hopes of securing best credit rating to build new schools
MADISON – Madison City Schools took the first big leap last night after voters approved a 12-mill tax increase last month to build two new schools. Earlier this week school officials traveled to New York City to meet with the agencies responsible with the school district’s credit rating.
Superintendent Robby Parker, Chief Schools Financial Officer Jana Gray, school board president Ranae Bartlett and school board vice President Tim Holtcamp met with financial service companies Moody’s and Standard and Poor’s on Wall Street Monday and Tuesday.
“Borrowing for new schools is similar to borrowing to buy or build a house,” Gray told school board members Thursday night. “You would start with going to the bank. They will pull your credit rating and that will determine what your interest rate will be. The first step for us to go to New York to talk with the credit rating agencies.”
The team from Madison made a strong pitch in an effort to secure a favorable bond rating. Since the Sept. 10 tax vote, the team has worked tirelessly putting together a strong financial package vouching for the economic strength of the community and public trust and accountability of the school system.
“We sent them a lot of documentation before we went, five years of audit reports,” Gray said. “When we were there, they had a lot of questions for us and we had a presentation prepared for them. They spoke very highly of Madison and the city of Huntsville. They were very impressed with the school district, and we got a lot of good feedback.”
A favorable credit rating will ensure taxpayers get the best deal in the bond market when the money is secured to begin construction.
“This is a huge undertaking,” Parker said. “The financial arrangements are the most extensive since the separation agreement in 1998 when Madison City Schools left the County to become an independent school district.”
This is the first time for the school to borrow money on their own. Previously, the district went through the city.
“The next step forward for us is the credit rating,” Gray said. “They didn’t give us the credit rating while we were there, it was just to give them the information to take to their analyst.”
Gray said the school district should know their credit rating by mid Oct. Once they get that they will be able to borrow the funds the district needs. “We will receive those funds in mid-November and be able to build the schools that we need,” Gray explained.
The special election was held to help the Madison City School district expand to meet the rising population in Madison. The increase will be used to construct an elementary school, middle school, high school additions, $3.5 million for additional operational support — SROs, counselors, teachers, utilities.
The additional revenue will also be used to convert West Madison Elementary into a district-wide PreK Center, make safety enhancements, address numerous deferred maintenance projects, and for innovative instructional initiatives.
Parker said site prep on the elementary school could begin possibly next month, with the middle school groundbreaking shortly after that.
Gray said she returned from the trip to New York very encouraged. “They spoke very positive,” she said. “We do not know what rating we are going to get, but we feel very positive about it.”