Esparto School District Raised to A+

Standard & Poor’s upgraded the rating on Esparto Unified School District, Calif.’s general obligation bonds to A-plus from A, and assigned a stable outlook.

“We raised the rating due to the district’s growth and maintenance of available reserves to a level we consider very strong during a time of constrained state funding,” S & P credit analyst Jaime Trejo said. “The strength of the district’s financial position, combined with its economic profile, is sufficient to offset the continued to declines in average daily attendance and change in our financial management assessment to the district to 'standard’ from 'good.’”

The district’s bonds are secured by its unlimited ad valorem tax pledge.

he district’s sound financial position is demonstrated by an estimated very strong projected unreserved general fund balance of 27% of expenditures in fiscal 2013, the ratings company said.

The report also noted the district’s extremely strong property wealth and adequate-to-strong income indicators as well as its low debt burden.

Located 35 miles northwest of Sacramento, the Esparto Unified School District serves a population of about 6,098 in Yolo County. Itseconomy is shallow and concentrated in agricultural-related business.

S&P does not expect to raise the rating during its two-year outlook horizon due to the district’s projections of declining average daily attendance and the constrained state funding environment.

“However, we could lower the rating if the district significantly draws down its reserves beyond current projections, particularly if we believe that the district is having difficulty achieving structural operating balance,” S&P said.

For reprint and licensing requests for this article, click here.
California
MORE FROM BOND BUYER