The Los Altos School District has retained its top-tier AAA credit rating from S&P Global Ratings, a designation held by only a small number of school districts statewide. Officials say the rating will save taxpayers money while supporting long-term campus improvements.
S&P also assigned the AAA rating to the district’s upcoming $90 million Series 2024A General Obligation Bonds, which will finance the first phase of the district’s Measure EE bond program.
District officials estimate that maintaining the AAA rating will significantly reduce borrowing costs. According to Erik Walukiewicz, assistant superintendent of business services, total debt service would have been approximately $1.28 million higher without the top rating. He said the rating helps the district secure the most favorable interest rates, maximizing the impact of taxpayer dollars.
The bond proceeds will fund major facilities work across the district, including construction of the new San Antonio campus, which is expected to open in fall 2028. Site work and reconfiguration efforts will also support a shift to a middle school model, adding sixth grade to both Blach and Egan schools.
The AAA rating reflects strong fiscal management and deep community support, according to S&P, which cited the district’s affluent Silicon Valley tax base, voter-approved parcel taxes and contributions from the Los Altos Educational Foundation.
Superintendent Sandra McGonagle called the rating “a testament to our community’s unwavering support and our board’s commitment to prudent fiscal stewardship.”
“By maintaining the highest possible credit rating, we ensure that we can fund vital school improvements at the lowest possible cost to our taxpayers,” McGonagle said.
The district noted that its reliance on local funding – rather than the state funding mix typical of many California districts – helps provide greater financial stability and predictability.
In addition to revenue strength, S&P cited the district’s proactive financial management, including maintaining reserves above 20% of revenue and “rightsizing” staffing in response to enrollment changes.
Over the past decade, the district has seen enrollment declines but recently reported stabilization, aided in part by the addition of Transitional Kindergarten (TK) classes required by the state. The district has also added staff to support the state-mandated Universal Meals Program while reducing overall staffing levels in recent years, from 467 full-time equivalent employees in 2022–2023 to a projected 410 in the upcoming school year.
Despite its strong outlook, the district acknowledged ongoing financial risks, including potential economic downturns that could affect property tax revenue, rising healthcare and inflation costs, and unfunded state and federal mandates.
Looking ahead, officials say maintaining adequate reserves will remain critical to sustaining programs and operations.
For residents, district leaders say the benefits of the AAA rating extend beyond finance. Strong local schools, they argue, help sustain home values and community quality of life.
“We have a great supportive community that supports our local neighborhood schools,” Walukiewicz said. “Anytime we invest in bonds, parcel taxes and donate to the Los Altos Educational Foundation (it) is critical for our success, and homeowners benefit from this as well.”
