The Huntington School District’s long-term debt continued to drop during the 2017/18 school year. The current amount is among the lowest of any comparably sized district on Long Island.
The district has largely 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, 2018 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 $1,565,000 in principal and $293,700 of interest for a total debt as of July 1, 2018 of $1,858,700.
“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 2017/18 school year. “The district’s outstanding serial bonds at June 30, 2018 are less than one percent of the district’s debt limit.”
The district retired $160,000 of long-term debt principal during the 2017/18 school year. Another $170,000 in principal will be paid off during the current fiscal year, $175,000 in 2019/20, $180,000 in 2020/21, $190,000 in 2021/22 and $200,000 in 2022/23.
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.
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.
“We have worked diligently over the last several years to reduce district debt to negligible levels, which has contributed to the district’s particularly high credit rating and low relative cost of tax anticipation note issuance,” Huntington Superintendent James W. Polansky said. “Low debt levels have also contributed to significantly positive audit reports, the most recent of which was just accepted by the Board of Education at its November meeting.”
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.