Clovis school district receives credit downgrade

CLOVIS — The Clovis school board got some bad news Tuesday about its credit rating going forward. But at least it was let down gently.

In a rather short meeting, the board heard from Moody’s credit analyst Heather Correia about the district’s downgrade of one level from Aa3 to A1.

Moody’s, Correia said, is reevaluating how it gives credit ratings for school districts, after previously treating them like other governmental entities.

“We felt as though school districts were unique from cities and counties,” Correia said. “They have a different mission, they have a different structure.”

Clovis was one of 15 scores reviewed in New Mexico and one of 700 nationwide as part of that process.

“In Clovis' case, the socioeconomic profile was considered average, but that's definitely because you have the Air Force base there,” Correia said. “Socioeconomics tend to skew down when there are a large number of government positions. Specific to Clovis, management is very strong and has a balanced budget and holds on to reserves, which is a challenge in New Mexico.”

The biggest reason for Clovis’ downgrade, Correia said, was that Moody’s considered the state’s pension plan for educational employees to be a large liability going forward. There’s nothing Clovis controls about that, Regina Gaysina of RBC Capital Markets said, but the state’s role contributes about 20% to the Clovis district’s overall score.

Correia said because of the district’s balanced budget and healthy reserves, it avoided a two-score downgrade.

Gaysina said so far, such downgrades haven’t had impacts on bond sales elsewhere in the state.

In other business at the Tuesday meeting:

• The board made small amendments to its recent contract extension for Superintendent Renee Russ, with the note that the contract now runs through June 30, 2023.

Board member Cindy Osburn said Russ explicitly asked for no salary increase unless her staff and team received one, and jokingly expressed relief that Russ accepted the contract extension “after the year we had.”

• Russ reminded the board the district would have spring break the following week, followed by a March 29 full re-entry for all students. The district will still offer virtual learning options for families who still desire it.

“I would like to emphasize, it will be a one-week spring break,” Russ said, referencing last year’s three-week break as a COVID-19 response. “And I'll predict that Monday morning we'll have 6 inches of snow because that's the day we're bringing all students back.”

• The next board meeting is scheduled for 5:30 p.m. April 27 at the G.C. Ross Administration Building. The meeting will be the board’s first in-person meeting since February 2020, and details are still in the works.