District faces S&P downgrade, board told bond sale will be approved Nov. 18

Robbinsdale Area Schools staff on Monday told the school board that S&P Global Ratings has downgraded the district's underlying credit rating and placed it on a negative outlook, a change administrators tied to recent financial shortfalls and audit findings.

"Our rating has dropped two scores," Kristen Hoheisel said in a presentation to the board, summarizing S&P's view that the district posted an unexpected $2,200,000 deficit in fiscal 2023 and settled labor contracts that increase salary costs in fiscal 2024 and 2025. Hoheisel said the agency cited weakened financial management practices and material weaknesses in internal control and financial reporting as factors that informed the downgrade.

Hoheisel described the board's prior decision to pivot from a competitive bond sale to a negotiated sale after the rating fell. She said that approach should mitigate, though not eliminate, higher interest costs tied to the lower rating. "We won't get the best interest rates available given our rating, but we did mitigate the impact," she told the board, and said staff will ask the board to approve the bond sale at the Nov. 18 meeting and will hold a public town hall on Nov. 20 to review the budget update.

Board members said they were alarmed by the report but differed on tone and responsibility. Director Holmes thanked staff for the candor and said the board must pursue corrective actions; Director Bassett said the downgrade points to a broader governance and system issue rather than a single individual's mistakes. Several directors urged immediate follow‑up on audit recommendations and oversight steps to restore financial control.

Hoheisel recommended that the board review the full S&P report included in the meeting packet and said the sale approval on Nov. 18 will include more detailed budget materials. The district also plans public engagement around the budget at the Nov. 20 town hall, she said.