As Union School District has managed to largely maintain its academic performance levels in the wake of the pandemic, it has also managed to right its financial ship, a ratings agency has confirmed.
On Nov. 25, Moody’s Ratings said it had abandoned an effort to potentially downgrade the District’s status in the bond market.
The K-8 district will get to keep its “Aa2 issuer” and “Aa1 GOULT” ratings, despite the investigation for devaluing its position, which had begun Oct. 1.
Moody’s said this change of course was down to “improved financial performance estimated for fiscal 2024 and stabilized enrollment…as well as consideration of unusually strong revenue and balances.”
USD, which is helmed by Superintendent Carrie Andrews, had a student body of 5,371 in 2023-24, according to ed-data.org.
The strong Silicon Valley economy “with robust resident income levels” is a major factor in the District’s Aa2 issuer rating, the agency said.
“High home values will continue to support favorable assessed valuation per capita, which equals $296,228 as of fiscal 2025,” it said in a release. “While high home costs are a pressure on enrollment, a prior downward trend has notably stabilized in fiscal 2025 with expanded transitional kindergarten and an increase in interdistrict transfers.”
And while nearby private schools reduce USD’s “capture rate,” these are at full capacity and instead can be viewed as “a significant revenue stream, as tenants in district-owned properties provide roughly $9 million in unrestricted lease revenue annually,” it stated.
In the recent CAASPP math standardized tests for 2022-23, 54.45% of USD students exceeded expectations, with 19.52% meeting expectations, 13.97% nearly meeting expectations and 12.07% not close to meeting expectations.
In CAASPP English language arts/literacy (for 2022-23) 45.83% of students exceeded expectations, while 28.42% met expectations, 14.21% nearly met and 11.54% did not meet expectations.
That shows relatively steady performance when compared with the last tests taken pre-pandemic, in 2018-19.
The 2022-23 CAASPP math results at Los Gatos Union School District, 49.56% of students exceeded expectations, 24.43% met expectations, 17.12% nearly met expectations, and 8.89% were not close to meeting expectations.
And at LGUSD that year, in English Language Arts/Literacy, 47.5% exceeded expectations, 30.21% met expectations, 13.92% nearly met expectations and 8.37% were not close to meeting expectations.
In 2022-23, USD had $78,183,492 in total revenue, compared with LGUSD which had $56,066,601 in total revenue.
Moody’s said while USD’s general fund balance is “quite narrow” at just 3.9% as of fiscal 2023, it “has considerable balances outside the general fund in its lease sub-fund, special reserve for capital outlay, extended childcare fund and self-insurance fund, which when combined equate to about 30% of general fund revenue.
“Revenue into these funds and the balances will remain available for district operations, with the district transferring lease revenue to the general fund annually,” Moody’s stated in a release. “The district also has a strong track record of voter approval for parcel tax measures, including 70.5% approval on the November 2024 ballot to increase its parcel tax from $96 to $148 for seven years, which will generate about $2 million annually in unrestricted revenue.”
