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U.S. PUBLIC FINANCE

Scorecard Framework

The scorecard in this rating methodology is composed of four factors, most of which comprise sub-factors.
The scorecard also includes five notching factors, which may result in upward or downward adjustments in
half-notch or whole-notch increments to the preliminary outcome.

EXHIBIT 1
US K–12 Public School Districts Scorecard Overview
Factor Factor Weighting * Sub-factor Sub-factor Weighting
Economy 30% Resident Income 10%
(MHI Adjusted for RPP / US MHI)†
Full Value per Capita 10%
(Full Valuation of the Tax Base / Population)
Enrollment Trend 10%
(Three-Year CAGR in Enrollment)‡
Financial Performance § 30% Available Fund Balance Ratio 20%
(Available Fund Balance / Operating Revenue)
Net Cash Ratio 10%
(Net Cash / Operating Revenue)
Institutional Framework 10% -- ** 10%
Leverage 30% Long-term Liabilities Ratio 20%
((Debt + ANPL+ Adjusted Net OPEB) /
Operating Revenue)††
Fixed-Costs Ratio 10%
(Adjusted Fixed Costs / Operating Revenue)

Total 100% 100%
Preliminary Outcome
Notching Factor Notching Range
Additional Strength in Local Resources 0 to +2
Limited Scale of Operations –1 to 0
Weak Financial Reporting –2 to 0
Potential Cost Shift to or from the State –1 to +1
Potential for Significant Change in Leverage –2 to +1.5
Scorecard-Indicated Outcome
*Factor weights shown in this table reflect standard weights. As described in Appendix A, we apply overweighting when scores are low.
†MHI stands for median household income. RPP stands for regional price parity.
‡CAGR stands for compound annual growth rate.
§Where available, we use data from financial statements based on the modified accrual accounting method to calculate or estimate these metrics.
**This factor has no sub-factors.
††ANPL stands for adjusted net pension liabilities. OPEB stands for other post-employment benefit liabilities.
Source: Moody’s Investors Service

Please see Appendix A for general information about how we use the scorecard and for a discussion of
scorecard mechanics. The scorecard does not include or address every factor that a rating committee may
consider in assigning ratings in this sector. Please see the “Other Considerations” and “Limitations” sections.

3 JANUARY 26, 2021 RATING METHODOLOGY: US K–12 PUBLIC SCHOOL DISTRICTS