Park City School Dist, Utah $10M GOs Rtd AAA By Fitch IBCA

Business Wire, Dec 29, 1999

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 29, 1999

Park City School District, Utah's $10,000,000 general obligation bonds, Series 2000 are rated `AAA' by Fitch IBCA based on the guaranty provided by the Utah School Bond Default Avoidance Program, whose claims paying ability is rated `AAA' by Fitch IBCA. The underlying rating reflecting the district's credit quality is `AA-`. The bonds are scheduled to sell competitively on Jan. 11. The `AA-` underlying rating also is assigned to $42.8 million in outstanding general obligation bonds.

The rating reflects Park City School District's sound financial operations, strong historical assessed value growth, high wealth levels, and moderate debt burden. These factors are offset somewhat by the local economy's dependence on tourism and substantial future capital needs based on projected student enrollment growth.

The district is located 10 miles east of Salt Lake City in Summit County and serves approximately 15,000 residents; boundaries include Park City and large portions of western Summit County. The area's population continues to grow rapidly and since 1990 student enrollment has nearly doubled to 3,818 students. The local economy is heavily dependent on ski-related tourism though non-ski activity is expanding. Much of the district's tax base includes second homes and expansive resort and hotel developments. However, some of the area's recent growth is attributable to an evolving residential base for Salt Lake City commuters. Unemployment levels in the county are low, with most jobs in the trade and services sectors. Wealth levels are well above state and national averages. Assessed values historically have experienced rapid growth while continued development suggests assessed values will continue to rise.

Financial operations are sound, evidenced by adequate general fund reserves and conservative budgeting. The fiscal 1999 general fund balance equals an adequate 12.1% of expenditures including an undistributed reserve equal to 5% of spending. The district ran a slight deficit in fiscal 1999, the first in three years. The fiscal 2000 budget plans to draw down on the general fund balance, however, the district projects a $750,000 surplus by year-end. Debt levels are moderate; the district's above average overall debt per capita level ($5,784) is offset by the low debt as a percentage of market value (1.72%). Amortization is rapid with roughly 88% of principal outstanding retired in 10 years.

This is the district's first issue to be sold from a $30 million authorization that passed with 59.5% approval in a special bond election held in Feb. 1999. The district plans to issue its remaining authorization over the next several years. The long term capital plan requires additional voter approved debt within the next ten years.