Fitch Rts Kings Canyon Joint Unified School District, California's GO's 'A+'

Business Wire, July 26, 2002

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--July 26, 2002

Kings Canyon Joint Unified School District, CA's $18.0 million general obligation bonds are rated 'A+' by Fitch Ratings. The bonds are scheduled to sell the week of July 29 through negotiation by Stone & Youngberg L.L.C.

The 'A+' rating reflects Kings Canyon Joint Unified School District's (the district) continued sound financial operations, steady assessed valuation (AV) growth and low debt levels. These factors are somewhat offset by a limited economic base, above-average unemployment rates, and below average income levels. Debt levels are in the low to moderate range. The district has experienced steadily increasing assessed valuations (AV), with an average annual growth of 4.1% over the last 10 fiscal years.

Located in portions of southeastern Fresno and northern Tulare counties, the district is home to 45,000 residents and encompasses a 599 square-mile area. Unincorporated areas of Fresno County and the City of Reedley make up the majority of the district's assessed value (which account for 42.44 percent and 41.7 percent of the district's assessed value, respectively), followed by unincorporated areas of Tulare County (9.25%) and City of Orange Cove (6.6%). Student enrollment for the 2002 year is 8,611 and is projected to increase 15% over the next 10 years. The local economy is heavily influenced by agricultural and food processing industries. Unemployment is above average and income levels are below state and national averages.

Financial operations are sound, marked by healthy general fund reserves. The fiscal 2001 ending fund balance totaled 11.9% of expenditures and transfers out, above the board policy of 5% and well above the state's 3% requirement. The district's fund balance has averaged 11.8% of expenditures and transfers out over the last seven years and is expected to end fiscal 2002 at 12.06%. The general fund has run surpluses the last three years, although expenditure growth has outpaced revenue growth in each of the last two years. State revenues provide 70.0% of the district's total general fund revenues.

The district currently has no general obligation debt outstanding and no future plans for additional debt issuance. The sale was approved by 64.9% of voters in March 2002 under California's Proposition 39 election procedure. Bond proceeds will fund construction of two high schools and a central food service facility. Bonds will be supplemented by state matching funds for project completion.