S&P Rts Firebaugh-Las Deltas Unif SD, CA Bnds 'BBB'

Business Wire, July 21, 1998

NEW YORK--(BUSINESS WIRE)--July 21, 1998--Standard & Poor's CreditWire 7/21/98--Standard & Poor's today assigned its triple-'B' rating to Firebaugh-Las Deltas Unified School District, Calif.'s G.O. bonds (election 1997) series 1998 dated July 1, 1998 due Aug. 1, 2023. The bonds are scheduled to sell July 22, 1998.

The rating reflects the district's:

-- Limited economy with concentration in the tax base

-- Low student-to-teacher ratios

-- Moderate debt

-- Solid financial performance

The district is located in the city of Firebaugh in Fresno County and includes the adjacent unincorporated areas of Fresno and Madera counties, approximately 45 miles northwest of Fresno. The district offers education for grades K-8 and serves around 8,900 residents. The district's enrollment has increased 21% (2,200 students) since 1994 due to an influx of young families moving into new housing developments. The district's student-to-teacher ratio of 25:1 is low for the combined kindergarten and 4-12 grade levels. State-supported class size reduction has been completed for grades 1-3 that have student-to-teacher-ratios of 20:1. Kindergarten class-size reduction will be completed in fiscal 1999.

Most residents find employment within this agricultural community's boundaries. Leading employers in the district include De Francesco & Sons Inc. (food processing), Spencer Fruit (fruit and vegetable packaging), and Toma-Tek (tomato processing). The district's tax base is concentrated, as eight of the leading 10 taxpayers (representing 25.2% of total assessed valuation) are in agriculture or industrial-related businesses. Despite California's soft real estate market in the mid-1990s, the district's property valuations were unaffected, increasing 25% since 1994 and currently at $308 million. Per capita market value is above average at $34,736. Firebaugh's overall wealth levels are very low. Per capita income is low at 42% of the state level. The household effective buying income is also low at 57% of the state average and 59% of the national average.

The district's operations have been solid from year-to-year with high ending balances. In fiscal 1997, the district ended the year with a $962,000 surplus. However, the district used capital leases to purchase additional relocatable classrooms and employed one-time expenditures for computer purchases, resulting in an unreserved general fund balance of $1.73 million, or 17% of expenditures. The district projects balanced results for fiscal 1998, bringing the unreserved general fund balance to around $1.4 million, or 12% of expenditures. The administration's stated goal is to have an unreserved general fund balance which meets the state's requirement of 3%.

Debt is moderate at 2.2% of market value and $763 per capita. Most debt is direct debt at 77%. The district has $3.5 million of authorized unissued debt that it plans to issue around 2000. Bond proceeds will finance construction of a new multipurpose room and additional permanent classrooms at the high school. This bond authorization was passed by voters (81%) on the first attempt in the November 1997 election.

OUTLOOK: STABLE The outlook reflects the district's agricultural composition, its moderate debt levels, and sound financial performance, Standard & Poor's said. ---CreditWire

    CONTACT:  Jonathan Chirunga, San Francisco, 415/765-5014
               Daniel Stone, San Francisco, 415/765-5016
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