The Huntington School District’s long-term debt continued to drop during the 2016/17 school year. The current amount is among the lowest of any comparably sized district on Long Island.
The district has pursued a pay-as-you-go approach to financing capital improvements and pension costs and has stubbornly adhered to a conservative budgeting philosophy.
A review of the district’s latest financial statements dated June 30, 2017 reveals the district has a low level of long-term debt, which has steadily declined in recent years.
Entering the current school year, Huntington owed just $1,725,000 in principal and $359,400 of interest for a total debt as of July 1, 2017 of $2,084,400.
“The district’s latest underlying, long-term credit rating from Moody’s Investors Service is Aa1,” according to an external audit that analyzed Huntington’s finances at the close of the 2016/17 school year. “The district’s outstanding serial bonds at June 30, 2017 are less than one percent of the district’s debt limit.”
The district retired $160,000 of long-term debt and interest during the 2016/17 school year. Another $160,000 will be paid off during the current fiscal year, $170,000 in 2018/19, $175,000 in 2019/20, $180,000 in 2020/21 and $190,000 in 2021/22.
The total debt will continue to plummet each year through the 2025/26 school year. By June 30, 2026 the district will have completely extinguished its current long-term debt. The district carried out a bond refunding in April 2015, which reduced the interest rate on its long-term bonded debt from between 4.125-4.25 percent to an average of 2.21 percent. The refunding resulted in interest savings of nearly $200,000 over the remaining years of the debt.
“We have taken great pride in prudent fiscal planning and the debt reduction that has taken place in recent years,” Huntington Superintendent James W. Polansky said. “Reduced debt levels have helped the district to achieve the highest of Moody’s ratings for a school district, which in turn has led to low levels of fiscal stress and negligible interest rates on tax anticipation notes. The district has avoided taking on additional debt through diligent long-term capital planning, including reserve funding and use according to a particularly responsible, Board-adopted reserve plan.”
Huntington has dramatically reduced its debt in recent years. As of June 30, 2009 the district had a total bonded debt of $6,370,000. That figure declined to $5,465,000 in 2010 and $4,515,000 in 2011. As of June 30, 2012 the district’s bonded debt stood at $3,525,000 and then dropped by more than $1 million over the following year.
While there has been turnover on the Huntington School Board over the past three decades, trustees have maintained a general disdain for increased debt levels and or budget gimmicks and overly optimistic fiscal forecasts.
Trustees have allocated millions of dollars to finance renovation and reconstruction projects through voter approved capital reserve funds. By utilizing property taxes already paid, the district has saved taxpayers millions of dollars in debt service while still addressing Huntington’s capital project needs.