Standard & Poor's Tuesday raised the underlying rating on the Lamar County School District's general obligation bonds two notches to A from BBB-plus based primarily on its rapidly expanding property tax base and good income levels.
The agency also raised the district's appropriation-backed debt two notches to A-minus from BBB, affecting $55.4 million of outstanding debt. The outlook is stable.
The GO rating reflects Lamar's adequate unreserved fund balance — despite running annual general fund deficits since fiscal 2008 — as well as a low debt burden and growth-related capital pressures.
Lamar County has experienced continued residential development. The district's total assessed value increased by 45% since fiscal 2007, for a total market value of $2.1 billion in fiscal 2009.
Following annual general fund deficits since fiscal 2008, the district drew down reserves for fiscal 2010 to an unaudited $2.2 million, amounting to an adequate 3.7% of expenditures.
School officials are projecting to draw down the unreserved fund balance again to about $1.7 million, or 2.9%, of expenditures in fiscal 2011.
"The district's growing enrollment trend and state funding cuts have primarily caused operating pressures and general fund deficits," McGlade said. However, overall net debt levels are a low $1,345 per capita, or 2.6% of market value.
