Business Services Industry

Fitch Rates Modesto City Elementary School District, California $17MM GOs 'AA-'

Business Wire, April 2, 2002

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--April 2, 2002

Modesto City Elementary School District, CA's $17 million general obligation bonds, election of 2001, series A are rated 'AA-' by Fitch. The bonds are scheduled to sell on April 2 through negotiation by Stone & Youngberg L.L.C.

The 'AA-' rating reflects Modesto City Elementary School District's (the district's) continued strong financial operations, steady assessed valuation growth, and low direct debt levels. These factors are somewhat offset by the local economy's below average income levels and above average unemployment rates. Direct debt levels are low, with overall debt closer to moderate levels. Financial operations are strong, with operating surpluses and healthy fund balances. The below average county income levels and above average unemployment rate reflects the large agriculture employment component of the county. Residential growth and assessed values continue to accelerate as a result of the district's affordable housing for San Francisco Bay area commuters.

Located primarily in the city of Modesto, the district includes a small portion of the city of Ceres, and adjacent unincorporated communities in Stanislaus County. The district encompasses 30 square miles with a district population of approximately 108,000. Facilities consist of 23 elementary schools and four junior high schools. Student enrollment for the 2002 school year is 19,158 and feeds into the Modesto High School District. The elementary school district and Modesto High School District are managed by a common governing board and administration. Assessed valuation growth has been largely positive, averaging 1.5% annually since fiscal 1996.

Financial operations are strong, with operating surpluses in the last three years. The fiscal 2001 general fund balance equaled a healthy 11.6% of expenditures and transfers out. The district's fund balance has averaged 11.7% over the past three fiscal years, well above the state's required 2% minimum. Labor relations are characterized as good and the district offers competitive salaries.

This sale was approved by more than 69% of voters in November of 2001. Proceeds will fund renovation and modernization of existing schools. Bonds are secured by an ad valorem pledge on all taxable district property.

COPYRIGHT 2002 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning
 

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