Moody's Investors Service recently revised Montgomery County Community College's outlook from negative to stable and affirmed Montco’s A1 rating.

The revision of the outlook is a reflection of Montco’s improving operating performance driven by expense containment, net tuition revenue growth, and increased funding from the Commonwealth of Pennsylvania and Montgomery County. The outlook provides additional insight on the rating.

Moody’s affirmed the A1 rating based on the approximately $97 million of outstanding rated bonds issued through the Pennsylvania State Public School Building Authority.

In fiscal 2017, county funding became millage rate based, increasing local sponsor support while also increasing the stability of the revenue stream. Financial reserves and unrestricted liquidity have also increased, bolstered by a higher retained cash flow.

The stable outlook reflects Moody’s expectations of a sustained strong cash flow driven by close expense management, continued revenue growth, and maintenance of unrestricted liquidity levels. It also incorporates our expectations for maintained state and local support and limited material near-term debt issuance.

The improved outlook and affirmed rating are beneficial to Montco. If Montco were to issue additional debt (bonds), the stable outlook would allow Montco to issue bonds paying a lower rate of interest, potentially resulting in a savings.