Standard & Poor’s upgraded the underlying rating on the Palos Verdes Peninsula Unified School District to AA-plus from AA-minus this week ahead of a $15 million general obligation bond issue.
Standard & Poor’s cited “very strong” economic fundamentals, readiness of voters to support the school system with extra taxes and growing fund balances as the reasons for the upgrade of the wealthy suburban school district.
“The raised ratings are based on our view of the district’s improved fund balance position and additional revenue flexibility in the form of parcel taxes,” said analyst Andrew Magee.
The district’s unreserved fund balance rose to $18.2 million in 2009, or 19% of expenditures, from $5.5 million, or 7% of expenditures, in 2006. Local voters have agreed to two temporary parcel tax increases through 2012 to offset the impact of the California state budget crisis, and the district has cut spending by 7% to keep its fund balances growing, Magee said.
The school district is located along the Pacific Ocean about 25 miles south of downtown Los Angeles and is headquartered in Palos Verdes Estates. It is a wealthy district with median incomes at 223% of the national average and assesses valuation per capita of $260,000.
The district’s assessed property values have been stable, according to Standard & Poor’s, in contrast to sharp declines in many other California communities.