Fitch Rts Park City School District, Utah $19.4MM GO Rfdng Bnds 'AAA'

Business Wire, Sept 18, 2002

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--Sept. 18, 2002

Park City School District, Summit County, Utah's $19,445,000 General Obligation Refunding Bonds (Utah School Bond Guaranty Program), Series 2002 bonds are rated 'AAA' based on the guarantee provided by the Utah School Bond Default Avoidance Program, whose claims paying ability is rated 'AAA' by Fitch Ratings. The underlying rating reflecting the district's credit quality without the guarantee is 'AA'. The bonds are scheduled to sell competitively on October 1. The underlying rating on the outstanding general obligation bonds is affirmed at 'AA'.

The 'AA' underlying 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 the district's additional capital needs.

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 more than doubled. The local economy remains dependent on ski-related tourism, though ongoing activities attract tourism year-round. Much of the district's growing tax base includes second homes and expansive resort and hotel developments. However, some growth also is attributable to an evolving residential base for Salt Lake City commuters. Unemployment levels in the county are typically above state and national levels, characteristic of seasonality in the tourism sector, with most jobs in the trade and services sectors. Wealth levels are well above state and national averages. Assessed value history has been very strong, averaging 14.4% over the last six years. Development activity remains strong suggesting continued assessed value growth in the near term.

Financial operations remain sound, with a substantial operating surplus in fiscal 2001. The general fund reserve balance and unreserved balance was 22.8% and 21.1% of spending, respectively in fiscal 2001. Current projections for the fiscal 2002 ending general fund balance include a slight drawdown. Debt levels are moderate with above average overall debt per capita but relatively low debt as a percentage of market value. Amortization of all outstanding debt is rapid.

The district has roughly $15 million in remaining authorized but unissued debt and plans to issue its remaining authorization over the next several years. The long-term capital plan is manageable and is not expected to require additional voter approved debt in the near future.