Maricopa Cnty USD No. 48 G.O. Bnds Rated 'AA' by S&P
NY -- Standard & Poor's CreditWire 9/15/97 -- Standard &
Poor's today assigned its double-'A' rating to Maricopa
County Unified School District No. 48 (Scottsdale), Ariz.'s $7.8
million school improvement bonds series 1997A due July 1, 2007 and $12.1
million school improvement bonds series 1997B due July 1, 2014.
At the same time, Standard & Poor's affirmed its
double-'A' rating on the district's outstanding G.O. debt.
The rating reflects:
-- A growing and diverse economic base with access to the entire
Phoenix area economic base;
-- Strong wealth levels;
-- A growing, but manageable, debt burden; and
-- Good financial flexibility.
The district (population 200,000) serves much of Scottsdale, as well
as portions of Phoenix, Paradise Valley, and Tempe, and district residents
have access to employment opportunities throughout the Phoenix region.
District enrollment has shown strong growth in recent years, increasing
28.4% since 1990 to 23,870 today. Property values are also showing strong
growth, increasing over 15% in 1998 to $14.8 billion or a very strong
$74,000 per capita. Wealth levels remain strong at 139% of the state and
114% of the U.S. Debt levels remain moderate and manageable, with overall
net debt after this issuance at $2,493 per capita and 3.9% of true value.
District voters recently passed an additional $106.7 million
authorization, which the district will issue over time to accommodate
growth needs. The district historically has issued debt in phases as
growth pressures have warranted, and debt levels are expected to remain
manageable as property values increase with the growth.
Financially, the district has significant flexibility. The district
ended fiscal 1996 with an unreserved general fund balance of $3.4 million,
or 3.7% of expenditures. However, the district expects this amount to be
adjusted downward in the 1997 audit by approximately $800,000 due to the
misallocation of a tax payment. For fiscal 1997, the district is
projecting an ending unreserved balance of approximately $1.8 million.
While the district is budgeting to spend the entire balance in 1998, based
on past experience, the district expects its ending 1998 balance to be
just over $1 million. In addition, the district maintains reserves in its
plant funds, which are available to fund operations. These reserves were
built up from the sale and lease of land. The district's policy is to
keep those reserves intact and only to spend interest earnings for ongoing
operations. These additional reserves amounted to $8.9 million in fiscal
1996 and are currently estimated to be $13.3 million. The district expects
this amount to increase to over $20 million by fiscal year end 1998 with
the additional sale of surplus school sites. In addition, voters recently
approved a five-year tax override, which allows the district to collect an
additional 10% in revenues, or about $8.3 million per year. This
additional flexibility has allowed the district to keep class sizes at
about 18:1 despite growth pressures.
OUTLOOK: STABLE
The outlook reflects the district's access to a strong and
diverse economic base and the district's additional financial
flexibility, Standard & Poor's said. -- CreditWire
| Credit Analyst: |
Daniel Stone, San Francisco (1) 415-765-5016 Jonathan Jacobson, New York (1) 212-208-1231 |
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