S&P Raises Gwinnett Cnty Sch Dist GO Bnd Rtg To AA+

Business Wire, June 18, 1997

NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 6/18/97 -- Standard & Poor's today has raised its rating on Gwinnett County School District, Ga.'s G.O. bonds to double-`A'-plus from double-`A'.

The outlook is stable.

The upgrade is due to significant economic development and expansion in the county (the county's G.O. rating was recently raised to triple-`A' by Standard & Poor's), as well as the district's voter-approved special local option sales tax (SPLOST), which is expected to provide $550 million over the next five years. This revenue will be used for the district's capital needs and to reduce debt service over the next five years. Other rating factors include the district's location within the diverse and growing Atlanta metropolitan area, sound financial performance, and high wealth indicators.

The rating remains in the double-`A' category due to:

-- The temporary nature of the SPLOST, which expires in five years,

-- The district's somewhat limited operating taxing flexibility, and

-- A moderate direct debt burden.

The Gwinnett County School District is coterminus with the county, with the exception of the city of Marietta, which has its own school system. Rapid population and enrollment growth, as well as strong economic development and expansion has been occurring and is expected to continue over the next several years. The current school enrollment of 84,553 has grown by 23% since 1992. Over the next five years, the district expects to add at least 3,700 students per year. Strong growth in the residential tax base is complemented by sound commercial development. Over the past 10 years, the district's tax base has almost tripled to $26.9 billion (estimated actual value). The economic diversity lends stability and resilience to the local economy, as unemployment rates remain below state and national levels. In addition, income levels exceed state and national averages.

Financial operations and position have been strong. General fund revenues and expenditures are performing better than budgeted this year, and the district expects an ending general fund balance of $50 million, or 10.5% of budgeted appropriations, at June 30, 1997. The school board budgets to maintain a reserve equal to one-month's operating expenditures (or about 8% of expenditures); the ending balance has exceeded this level on both a budgetary-basis and a GAAP-basis for the past four years.

OUTLOOK: Stable.

The outlook reflects the district's strong debt and fiscal management during a period of significant economic expansion. -- CreditWire

CONTACT: Veronica A Vilardo, New York, 212/208-1761

Bernhard H Fischer, New York, 212/208-8102