Moody's Investors Service has reduced the Shakopee Public Schools' bond rating, the second such downgrade in less than a year.
The district fell two levels, from an A2 to a Baa1, earlier this month as a result of narrowing general fund reserves, mounting debt and pension burdens.
Moody's ratings are used by investors to determine the relative creditworthiness of securities being sold by school districts and other entities. A bond rating is similar to a credit score — better ratings result in better borrowing rates.
Despite a strong local economy, above average household incomes and growing enrollment, Shakopee ISD 720 received a negative outlook from the agency.
The district, which has weathered back-to-back budget deficits, is now considered a moderate credit risk.
But the district's finance director, Jeff Priess, remained optimistic, saying the bond rating was determined based on financial information reported during last year's audit on June 30, 2017.
"The rating does not reflect the fact that the district projects a balanced budget for the current year and a surplus for the upcoming 2018-19 fiscal year, two factors that can lead to an increased rating," Priess said.
Interim Superintendent Gary Anger is hopeful next year will shake out differently. "We continue to try and right the ship," he said.