Community colleges are local units of government that receive state funding and have local and state accountability. That means central Illinois should be interested in how its community college performs. While people are aware of whether or not the college is accredited, they rarely look at other measures of accountability. One of our main responsibilities to our community is to be good stewards of the monetary resources we're given. Bond rating is one measure of fiduciary accountability.
In July, Illinois Central College received word from Moody's that its bond rating had been upgraded from A1 to Aa3, the second time in the past three years an improved rating has been granted to the college. The new rating is just three steps below Moody's highest rating. Upgrades like this testify to the careful and intelligent management of financial assets, especially in an era where funding to community colleges like ours continues to be uncertain.
Why should the community care about this rating? According to Moody's, this rating is evidence of the college's "sound financial operations and manageable debt burden, including its own modest level of rapidly retired debt." Moody's report commends ICC for its sound budget management and competitive tuition rates. The report also noted ICC's strong transfer and articulation agreements, supportive educational foundation, unique program offerings, and continuing enrollment growth. The credit for this improved rating extends beyond ICC and into our local community. Moody's examined the strength of our region's economy and cited its growth as another factor that reflected favorably upon ICC.
While bond ratings have specific implications for the ability of an organization to access additional funds, the grade itself tells a bit about the character of the organization. Upgrades of bond ratings are causes for celebration. Upward movement signals the people within the organization-and especially those who have fiduciary accountability-are carefully monitoring the organization's assets, revenues, and expenditures; the environment in which the organization exists; its markets; and its day-to-day operational demands. Through this monitoring, financial and operational adjustments must be made to keep the organization healthy enough to serve its constituents without breaking the bank.
The Illinois community college system was established under the premise that community colleges would be equally funded by tuition, the local tax levy, and the state. That's no longer true. Today, the state provides less than a quarter of ICC funds. Decreasing funds from the state and increasing enrollments have posed challenges for the college.
Under the best of financial circumstances, institutions must work hard to secure higher bond ratings. But such an upgrade under stressful financial situations is indeed a cause for celebration at ICC. The celebration isn't because ICC has shown the fiduciary discipline to achieve an improved bond rating. The celebration is because the improved bond rating is a sign the college remains strong and healthy, in spite of the obvious challenges we face.
There's no doubt the Aa3 rating is an outstanding financial achievement and reflects positively on the financial position of our college and the economic viability of our community. But financial achievement aside, the new rating is reassurance to our community that we're acting as good stewards of resources and that we'll continue to do what we do best-meet the educational needs of our community. IBI