San Diego Unified scored high on its financial report card from two major credit rating agencies, Standard & Poor’s and Moody’s. Both gave the school district their highest short-term ratings.

Standard & Poor’s cited the school district’s practice of setting aside existing money to make payments

“We look at cash,” said Le Quach, the primary credit analyst behind the S&P report. “Can they rely on existing cash flows to make their set-aside?”

The ratings are a big deal this year because San Diego Unified will have to borrow money to make payroll this fall, thanks to a state government decision to delay payments to schools. Preserving the credit rating was also touted by school board President Katherine Nakamura as a reason not to raid its emergency reserves during the budget crisis — a move that was criticized by employee unions, who pushed for San Diego Unified to use the funds to avoid layoffs.

Those reserves factored into the short-term rating, but they weren’t the main focus, Quach said.


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