Minneapolis Special School District No. 1 won an upgrade from Moody’s Investors Service in recognition of its strong fiscal performance.

Moody’s raised the district’s underlying rating to Aa1 from Aa2. The district participates in the Minnesota School District Credit Enhancement Program, which is rated Aa2.

The district on Tuesday competitively sold about $80 million of new-money and refunding bonds. Proceeds are funding various capital and maintenance projects and refunding outstanding debt for savings.

The upgrade is “based on the district’s strong financial operations despite state aid pressures, healthy reserves with planned use in fiscal 2013; demonstrated history of proactive management practices and policies [and] a sizeable and diverse tax base,” Moody’s wrote.

Other factors include the recent stabilization of enrollment and debt levels that are expected to remain manageable.

The district is challenged by declining valuations, past declines in enrollment, state aid delays, and a history of delayed and pending contract negotiations.

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