Gateway Technical College District, WI — Moody's Assigns Aaa To Gateway Technical College District, WI's GO Notes

Rating Action: Moody’s assigns Aaa to Gateway Technical College District, WI’s GO notesGlobal Credit Research – 11 Jan 2022New York, January 11, 2022 — Moody’s Investors Service has assigned a Aaa rating to Gateway Technical College District, WI’s $7.4 million General Obligation Promissory Notes, Series 2021-2022D. Moody’s maintains the Aaa rating on the district’s outstanding general obligation unlimited tax (GOULT) debt. Following the sale, the district will have about $80 million of GOULT debt outstanding.RATINGS RATIONALEThe Aaa rating reflects the district’s large, diverse tax base located between the cities of Milwaukee (A2 negative) and Chicago (Ba1 stable), healthy financial position and a low debt and pension burden. The rating also considers the district’s declining enrollment and limited revenue-raising ability. Fund balance increased modestly in fiscal 2021 (year-end June 30) because of the district’s conservative enrollment budgeting and expenditure controls, though the increase will likely be offset by a modest budgeted draw in fiscal 2022.RATING OUTLOOKMoody’s does not typically assign outlooks to local governments with this amount of debt.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING- Not applicableFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING- Narrowing of operating reserves or liquidity- Significant growth in the debt or pension burdenLEGAL SECURITYDebt service on the district’s general obligation debt, including the current notes, is secured by its pledge to levy a designated property tax not limited by rate or amount.USE OF PROCEEDSProceeds of the notes will fund building remodeling and improvement projects. The notes will also be used to refund outstanding portions of the district’s General Obligation Promissory Notes, Series 2014-2015A, General Obligation Promissory Notes, Series 2014-2015B, General Obligation Promissory Notes, Series 2014-2015C, General Obligation Promissory Notes, Series 2014-2015D and General Obligation Promissory Notes, Series 2014-2015E for savings.PROFILEGateway Technical College District is located 20 miles south of Milwaukee and provides vocational education to a full-time equivalent enrollment of approximately 3,900 within Kenosha , Walworth, and Racine (Aa2 stable) countiesMETHODOLOGYThe principal methodology used in this rating was US Local Government General Obligation Debt published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1260094. 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