DeKalb County school district: Credit rating stable, also wins $3 million grant from Wallace Foundation

By David Pendered

A New York credit rating agency on Tuesday assigned a top score to the $36 million bond package the DeKalb County school district intends to sell Wednesday.

Michael Thurmond

Michael Thurmond

Also Tuesday, the Wallace Foundation announced DeKalb as a recipient of a $3 million grant to improve the leadership skills of its principal supervisors or regional superintendents, and to increase the number of regional superintendents in order to reduce a span-of-control that now averages 27 direct reports.

Taken together, the measures mark the continuation of the district’s slow but steady improvement from situations involving its accreditation probation and fiscal management in the 16 months since the DeKalb school board first named former state Labor Commissioner Michael Thurmond as interim superintendent.

“We are honored to have been selected by the Wallace Foundation to participate in this groundbreaking initiative” Thurmond said in a statement released Tuesday. “This is a game-changer for the DeKalb School System.”

Moody’s Investors Service mentioned both the accreditation and fiscal management issues in its Tuesday rating action.

In issuing an outlook of “stable” on DeKalb school debt, Moody’s observed:

  • “The stable outlook reflects the expectation that the district’s financial position will remain narrow over the next few years given limited revenue raising flexibility, and the likelihood of minimal future expenditure cuts following significant reductions over the last three years.
  • “These limitations are balanced against estimates of a return to positive fund balance in fiscal 2013 and 2014. The outlook also acknowledges recent financial and managerial changes in the district.”

Moody’s continued the analysis later in the rating action:

  • “The stable outlook reflects the district’s weak financial position, which is expected to remain challenged and below informal targets due to limited revenue raising flexibility and the expectation of minimal future expenditure cuts. The outlook is also based on the district’s pending accreditation review and the one outstanding lawsuit.”

Moody’s rating action was triggered by the school district’s plan to sell $36 million of short-term notes in order to cover operating costs until property taxes are collected this autumn. The sale of such tax anticipation notes are common in Georgia.

In addition to rating the planned short-term borrowing of $36 million, Moody’s affirmed two previously issued credit scores assigned to the school district’s existing debt.

Moody’s rating action said the district’s credit score benefited from a Georgia program that ensures lenders are paid even if a local district faces a shortfall:

  • “The Aa1 enhanced rating is based on the additional security provided by the State of Georgia’s (G.O. rated Aaa/stable) School District Intercept Program (GSDI), under which the State Board of Education (BOE) is required to transfer state aid appropriated for each school district (including charter school systems) directly to the paying agent in case of debt service shortfalls.”

Moody’s ratings actions typically include a section in which analysts outline their view of the borrower’s strengths and challenges. In the case of the DeKalb school district, Moody’s analysts observed:


  • “Sizable, diverse tax base with above average income levels;
  • “Low debt burden that benefits from the use of the special purpose local option sales tax;
  • “Return to positive operating performance.


  • “Historically below average reserves that remain challenged due to state aid cuts and a tax cap;
  • “Pending accreditation status.”

The Wallace grant is provided by the foundation created by the founders of the Reader’s Digest Association, DeWitt and Lila Acheson Wallace.

The Wallace Foundation is funding a $30 million Principal Supervisor Initiative in a total of 14 urban school districts nationwide. DeKalb was chosen because it is among “the nation’s most advanced school districts in recognizing the important of the regional superintendent position,” according to a statement released by the DeKalb school district that sourced the quote to the Wallace Foundation.

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

4 replies
  1. DSW2Contributor says:

    Despite this good news, the Dekalb County School District continues to be a very troubled school district.  On its Paperless Applicant Tracking System (PATS) job application website (, Dekalb currently has openings for 4 Principals, 17 Assistant Principals and 262 Teachers.
    All these vacancies need to filled in time for pre-planning week, which begins August 4 according to the School District calendar:

  2. Burroughston Broch says:

    This grant is to help DeKalb County School District to increase the number of central office staff who supervise principals. DCSD could have easily funded these positions within its budget by firing some friends & family in the central office who accomplish little. Once the Wallace grant is spent, these new positions will become additional central office overhead.
    Little ever changes at DCSD. Rather than fix the problems, just find someone else to pay for them.Report


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