S&P Rates Perris Union High Sch Dist,CA TRANs SP-1+

Business Wire, Oct 8, 1998

NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/8/98-- Standard & Poor's today assigned its 'SP-1'-plus rating to Perris Union High School District, Calif.'s 1998-1999 tax and revenue anticipation notes due Oct. 26, 1999. The notes are scheduled to sell Oct. 15, 1998.

The rating is based on:

-- Strong coverage from net general fund cash balances,

-- Early set aside of pledged monies in a note repayment account, and

-- Strong financial performance.

Note proceeds will be used to provide funds for fiscal 1999 general operations to cover the differences between cash receipts and disbursements. The notes are secured by taxes, revenues, and other receipts attributable to fiscal 1998-1999 and other lawfully available funds of the district. Projected coverage is 1.21 times (x) at maturity and 2.29x, 1.94x, and 5.48x at each of the segregation dates, (50% in February, 50% in May, and interest in June). With alternative liquidity of $370,000 in the capital facilities fund, projected coverage increases to 1.29x.

Note proceeds and the repayment fund will be invested in the Riverside County investment pool or other Standard & Poor's approved investments. Riverside County treasurer's investment pool satisfies Standard & Poor's general guidelines for investment of municipal issuers' operating and note repayment funds (see May 18, 1998 CreditWeek Municipal).

The district provides education for grades 7-12 at three sites for the residents in the Perris area. Enrollment is projected at 5,262 for fiscal 1999, an increase of 52% since fiscal 1995. The student-to-teacher ratio is high at 36:1. The district is able to accommodate the increase in students through the purchase of additional portable classrooms.

The district has maintained strong financial management, posting small operating surplus positions during fiscals 1996 and 1997. Estimated actuals for fiscal 1998 show an operating deficit of $808,667 due to one-time expenditure needs from weather-related damage to facilities, decreasing the general fund balance to $700,973, or 2.6% of expenditures. The district budgeted an operating surplus of $685,612 for fiscal 1999, increasing the general fund balance to $1.3 million, or 5.2% of expenditures. The district has been able to increase employee salaries by passing on the state provided cost-of-living adjustments, Standard & Poor's said. -- CreditWire