Belen Schools officials travel to Dallas to help with high bond rates
In an effort to attain a lower interest rate on the sale of Belen Consolidated School's general obligation bonds, school administrators went to Dallas, Texas, to meet with the company that set the district's rock-bottom bond rating.
With the sale of $13.25 million worth of bonds scheduled for Aug. 13, resolving this issue became a pressing matter.
"If we went out and tried to sell our bonds, if we were fortunate enough to sell them, we would be paying an extremely high interest rate to whoever purchases our bonds, so we really needed to get our rating back down," said Board of Education President Sam Chavez at a recent board meeting.
Chavez, George Perea, the district's business and finance director, and David Carter, the district's support services director and a Belen city councilor, met with representatives from the credit rating agency, Moody's Investors Service.
The meeting's objective was to restore the district's bond rating and credibility, said Charles Casey, owner of Casey Financial Consulting and the district's financial advisor.
"That's what we need to do as far as trying to get them to restore our rating back to where it was and not at some lower level," Casey said at the July 9 Board of Education meeting. "We need to give them confidence in the management of the district. I think they're a little worried."
The unfavorable rating from Moody's was due to the district's last two audits, from 2009-10 and 2010-11, receiving disclaimer opinions by the independent financial auditor, Accounting & Consulting Group, LLP. A disclaimer audit is when auditors cannot complete an accurate audit report and, therefore, cannot state the district's financial status.
The Albuquerque-based firm assigned Belen Schools this opinion because of accounting errors, a lack of internal controls, an incomplete transfer of accounting information to a new accounting software, involvement of three financial consultants from separate firms with a hands-on approach and repeated changes in the business and finance director's position, the department's staff and the superintendent.
"We needed to meet with Moody's and assure them that our issues that we had been dealing with the last couple of years had been resolved," Chavez said.
At the meeting, school administrators explained why the district received two unfavorable audits two years in a row, why the district received the best audit finding, unqualified, the year after, that Belen voters authorized the sale of bonds to improve aging structures within the district and the status of Belen's economic forecast.
Moody's representatives will now use this information to create a report and recommendation for the company's bond rating committee, which will make a final decision on whether to change the district's rating.
Perea got a good feeling from Moody's representatives and believes "the recommendation going to the bond-rating committee will be very favorable to put us back on track," he said.
Once bonds are sold, construction on an indoor community swimming pool at Belen High School and Family School's new building, among a list of other projects, can begin, Chavez said.
"We are trying to do the best we can to get the voters of this community the best interest rate on their bond money as we can," Chavez said.
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