LTCC Gets High Marks in Bond Ratings
February 8, 2018
After receiving high marks for a second time from both Standard & Poor’s (S&P) Financial Services and Moody’s Investor Service in their bond ratings reports, Lake Tahoe Community College (LTCC) is ready to issue its second set of bonds for sale with the Measure F general obligation bond.
S&P raised the college’s long-term rating from “AA-“ in 2015 to “AA,” an upgrade that reflects LTCC’s track record of consistent financial practices, strong available fund balances, excellent projection modeling, and sound fiscal management. The rating agency also noted South Lake Tahoe’s extremely strong property values, reflecting the significant amount of revenue stemming from property taxes on second homes in the area. Other factors that led to the improved rating included LTCC’s strong available reserves thanks to the LTCC Board of Trustees’ policy of maintaining at least 10% of general funds in a reserve account.
Moody’s reconfirmed LTCC’s A1 rating and improved its outlook from stable to positive based on LTCC’s sizeable and primarily residential tax base, which is growing. In addition, Moody’s mentioned LTCC’s strong and consistent management team, its low Other Post-Employment Benefits (OPEB), and moderate pension burdens as factors in their A1/positive rating.
LTCC Superintendent/President Jeff DeFranco said, “These are really positive ratings that reflect our strong financial practices over many years. We’re in great fiscal shape, and Moody’s and Standard and Poor’s definitely recognize that fact. It’s nearly unheard of for a school our size to see these kinds of rating upgrades in just a few years. And to get the bond ratings news just after learning that we had our accreditation status reaffirmed at the highest level is hugely gratifying, and a testament to the college’s exceptionalism.”
Compared to other schools in California’s community college system, LTCC’s latest bond ratings put it in the best of company. LTCC’s ratings place it at the top of the smallest eight colleges in the system, a group LTCC often compares itself to based on many shared factors. Even more impressively, they put LTCC in the company of some of the higher bond rated colleges in the system, including schools located in urban centers that serve many more students, receive more monies from the state as a result, and that benefit from being located in more robust areas of the state with higher assessed property values.
LTCC Vice President of Administrative Services Russi Egan said, “Our ratings results are outstanding, especially considering the size and relative isolation of our college and town. We often say around campus that LTCC is ‘small but mighty’ – this news is yet another positive sign coming from outside the Basin that the college is doing its job exceptionally well.”
DeFranco and Egan together presented to both Moody’s and S&P on January 22. In their presentation, they shared an overview of LTCC’s district, a financial summary of the district, an outline of Measure F and its finance plan, an overview of the district’s economy and assessed value summary, and other relevant information about the South Shore community.
In its second series of Measure F general obligation bond sales coming in February, LTCC will sell $15 million to continue to improve campus facilities and technology, and to modernize classrooms to improve student learning per the official Measure F bond language.
LTCC’s first issuance of Measure F bonds was in July 2015. Morgan Stanley is acting as the underwriter for the bond. Investors interested in purchasing LTCC bonds can contact the District or Morgan Stanley for additional information.