NEW YORK - Standard & Poor's Ratings Services said it raised its underlying rating (SPUR) to A-plus from A-minus on Castaic Union School District, Calif.'s general obligation bonds. At the same time, Standard & Poor's assigned its A rating to the district's 2010 refunding certificates of participation (COPs). The outlook on all ratings is stable.
"The raised SPUR is based on our view of the district's very strong financial position as it moves into a difficult funding environment," said Standard & Poor's credit analyst Jen Hansen.
S&P believes the district has very strong fund balances as it moves into a difficult state funding environment. It ended fiscal 2009 with an unreserved fund balance of $2.9 million, or a strong 11.6% of expenditures, up from $2.6 million in fiscal 2008. The district has maintained unreserved fund balances of more than 10% of its general fund since the beginning of the decade.
It took advantage of the state's relaxation of categorical funding and federal stimulus moneys to balance the 2009 budget. According to the first interim report, the district will maintain its unreserved fund at $2.9 million for 2010, although management has stated that it plans to spend down some reserved funds and projects additional drawdowns in future years. S&P understands that the district is negotiating with its bargaining units to reduce its employment-related expenditures.
Castaic Union School District, with a population of 28,421, is 35 miles north of the City of Los Angeles in Los Angeles County. Average daily attendance totals 3,197 in 2009.
