Moody's Affirms Gahanna-Jefferson City School District's Aa3 Issuer Rating

Strategic Insights -

The Moody's Investors Service has affirmed the Aa3 issuer rating for Gahanna-Jefferson City School District, OH, reflecting the district's robust economic base near major employers in the Columbus area. The district's financial operations are expected to remain strong, despite forecasted growth in expenses that may necessitate new revenue or operating adjustments. The district has a growing enrollment trend, high resident income ratio, and available operating fund balance ratio of 65% as of fiscal 2024.

Key Takeaways:

  • The Aa3 issuer rating reflects the district's robust economic base and growing enrollment trend, which support its high resident income ratio of nearly 150%.
  • The district forecasts closing fiscal 2025 with an operating loss of less than $1 million and a $6.8 million draw in fiscal 2026.
  • The long-term liabilities ratio is elevated at 425% of revenue but is expected to gradually decline as the district addresses all facilities.
  • The Aa3 rating on general obligation unlimited tax (GOULT) bonds is the same as the issuer rating due to the district's full faith and credit pledge and unlimited property tax to pay debt service on the bonds.
  • The A1 rating on lease revenue bonds, including the proposed Certificates of Participation (Gahanna-Jefferson City School District, Franklin County, Ohio School Facilities Project), Series 2025, is one notch below the issuer rating due to the contingent nature of the pledge.
  • The outlook is stable due to the district's robust economic base, solid history of voter support, and strong financial reserves.

Statistics:

  • The district has approximately $280 million in total debt outstanding at the close of fiscal 2024.
  • The district has a long-term liabilities ratio of 425% of revenue as of fiscal 2024, which is expected to decline as the district addresses all facilities.
  • The fixed-costs ratio is high at 21% as of fiscal 2024.
  • The available operating fund balance ratio is 65% as of fiscal 2024, with forecasts indicating an operating loss of less than $1 million in fiscal 2025.

Sources:

  • Moody's Ratings, "Gahanna-Jefferson City School District, OH" (no date)
  • Moody's, "US K-12 Public School Districts" (July 2024)
  • https://ratings.moodys.com/rmc-documents/425431
  • https://ratings.moodys.com
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