Centennial School District Gets New Bond Rating

WARMINSTER, PA — The Centennial School District has received a new bond rating from Moody’s Investors Service.

Moody’s Investors Service assigned the school district an Aa2 general obligation limited tax (GOLT) rating to the district’s Series A, B, and C of 2025 General Obligation Bonds.

A school district's bond rating is similar to an individual’s credit score in that both reflect financial reliability and trustworthiness.

In issuing the rating, Moody’s cited the district’s healthy financial position, strong fund balance,positive enrollment trends, a stable tax base, and household income levels at 120 percent of thenational average. The district’s leverage — debt relative to revenue — is expected to remainmoderate and manageable.

The rating affirms the district’s healthy financial position and prudent fiscal management, school officials said.

“This rating reflects our ongoing commitment to sound financial management and demonstrates our ability to meet obligations while saving taxpayer dollars and investing in our students’ success,” Schools Superintendent Abram Lucabaugh said. “We are pleased that Moody’s has recognized both our efforts and the financial strength of the district. I also want to thank our financial team for their continued dedication and hard work.”

Moody’s rating system, widely recognized by investors and financial institutions, provides an
independent assessment of creditworthiness.

Ratings range from Aaa (the highest level of creditworthiness) to C (substantial risk of default). The median rating for public K-12 school districts nationwide, as well as in Pennsylvania, is Aa3.

Centennial School District’s Aa2 rating — one notch above the median — underscores its robust financial health.

A higher rating enables the district to borrow at lower interest rates, ultimately saving taxpayer dollars, school officials said.

The Aa2 rating reflects strong financial metrics, including a restricted and unrestricted fund
balance ratio equal to 20.4 percent of total revenue at the end of fiscal year 2024.

Moody’s noted that a “material decline of reserves and liquidity to under 15 percent of revenue could lead to a ratings downgrade.”

The district’s ratio, which includes the General Fund balance and the Debt Service Fund but excludes the Capital Fund, serves as a key indicator of financial stability.

Centennial’s 2024 fund balance of $29.6 million is composed of:

• $16.9 million in the Debt Service Fund
• $2.5 million in the Committed General Fund
• $10.2 million in the Unassigned General Fund

Importantly, the district’s unassigned fund balance remains within state regulations, which
require it to stay below 8 percent of total revenue.

Proceeds from the bond sale will be used to refund 2017 bonds at a reduced rate, saving the school district more than $890,000 by lowering annual debt service expenses. Combined with last
year’s refinancing, total savings now approach $5 million, school officials said.