Chambana Sun

S&P Global Ratings revised Champaign County School District 116's financial outlook rating from negative to stable recently, partly based on changes to the district’s financial management practices that promise a better ability to service its debt.

As welcome as the news is to the district,  S&P Global Ratings credit analyst Scott Nees told the Chambana Sun there is still much work that needs to be done by district officials.

The agency also affirmed the district’s ‘AA-’ rating, but Nees pointed out that stability is key.

“There is still a chance things could go all haywire,” he said. “Now it’s just much more unlikely that will happen. What the rating means is right now we don’t see any sign of significant deterioration.”

The rating applies to the district’s general obligation (GO) debt and is used to determine how much interest it will pay for the bonds it issues. The rating is based on an evaluation of a borrower's income stream through the tax revenue it stands to collect and its financial management practices.

Still, the updated ratings are largely viewed as a major accomplishment for the district and come despite the fact that S&P recently deemed its overall budgetary performance as “uneven.”

“We typically try to resolve concerns we’ve expressed through our ratings within a two-year period,” said Nees.

S&P’s evaluation began in April 2015.

“Since then, the board has made a commitment and sort of shown enough stability to warrant this,” he said.

Nees said there might still be operational shortfalls, but the new fiscal practices put the district on a path toward doing a little better than breaking even.

"As such, we no longer believe financial deterioration significant enough to warrant a lower rating is likely in the next two years," he said.

The Champaign-Urbana economy is anchored by the University of Illinois.