Reply to APS Superintendent High School Overcrowding Plan

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Reply to "APS Superintendent High School Overcrowding Plan"

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[quote=Anonymous][quote=Anonymous]These last few posts are helpful. Can somebody explain to me how the 10% cap works? I see it explained on the County website that the ratio of net tax-supported debt service to general expenditures "should not" exceed ten percent within the ten-year projection. But are we close to that cap now?

The new bonds will put us extremely close -- about as close as we can get.

And if yes, what happens if we go over?  Does that automatically drop our bond rating, or does it just become a risk?

Drops.

And is it really a big deal to drop from AAA to AA+? Both are still considered pretty good investments from an outsider perspective.

Still raises cost of of all our borrowing, and we borrow hundreds of millions.

And are school bonds looked at against all general expenditures? Or is it school bond debt service looked at specifically as a percent of school general expenditures?

School expenditures. They could do it other ways, but generally the county and schools split the bond capacity the same as they split the revenue, which is about 55/45. They could in theory do it differently, but then ratio of bond interest coming out of annual school budget would be off too.

I want to write a letter urging a bond issuance to buy land to build a 4th high school, but want to make sure that I am using the right financial terms and addressing to the right board. TIA.[/quote][/quote]

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