Pima Community College gets second-highest bond rating with a 'negative outlook' from Moody's

Pervasive problems, risk of accreditation loss alarm Moody's
2013-05-14T00:00:00Z 2014-08-05T11:03:35Z Pima Community College gets second-highest bond rating with a 'negative outlook' from Moody'sCarol Ann Alaimo Arizona Daily Star Arizona Daily Star
May 14, 2013 12:00 am  • 

A major bond rating firm has taken notice of the turmoil at the top of Pima Community College.

Moody's Investor Service has affirmed the college's healthy credit rating for now, but issued a "negative outlook" for the school on Monday.

The negative label is a direct result of PCC being placed on probation last month by its accreditor, the Chicago-based Higher Learning Commission, Moody's said.

The accreditor identified pervasive problems with PCC's governance and administration, including "dysfunctional" board members, corrupt contracting practices and abusive senior executives who created a "culture of fear."

The college has two years to correct the shortcomings or risk losing accreditation.

Moody's said while it's "likely" the college will fix its problems, "the negative outlook reflects the significant cliff risk (PCC) faces if accreditation were terminated."

The rating affirmation and negative outlook affect $3.3 million of outstanding rated general obligation debt.

PCC finance boss David Bea, on whose watch the college issued numerous contracts that broke its purchasing rules, downplayed the seriousness of the negative label.

In a news release Monday, Bea highlighted PCC's continued Aa1 credit rating from Moody's, the second-highest rating possible.

Bea said the rating "is clear confirmation that PCC has been and will continue to be a prudent steward of public funds."

Contact reporter Carol Ann Alaimo at calaimo@azstarnet.com or at 573-4138.

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