SAN FRANCISCO - Standard & Poor's has raised the rating on Pittsburg Unified School District's general obligation bonds to A-plus from A, based on strong reserves and increasing enrollment.
The agency also raised the district's outstanding appropriation obligations to A from A-minus.
The California school district, located in the East Bay region of the San Francisco Bay area, serves more than 10,500 students in kindergarten through 12th grade.
According to Standard & Poor's, the district enjoys a stable average daily attendance, which drives its operating revenues.
"The raised rating reflects our opinion of the district's maintenance of strong reserves, increasing enrollment, and projected increases in state apportionment levels from prior years," said Standard & Poor's credit analyst Jaime Trejo.
Trejo also cited the district's access to the strong and diverse Bay Area economy, as well as good financial management policies, as basis for the A-plus rating.
These factors are partially offset by the high unemployment rate in the area, coupled with the district's high debt burden and moderate carrying charges, Trejo said in a report released Aug. 4.
The district's GO bonds are secured by revenues from unlimited ad valorem taxes levied on taxable property within the district. The Contra Costa County Board of Supervisors has the power and obligation to levy these taxes at the district's request for bond repayment.
Standard & Poor's gives the district a stable outlook, saying that it expects strong financial flexibility through fiscal 2015, stable average daily attendance trend, and stability in state revenues during the next two years.
"We do not expect to change the rating within the two-year outlook horizon, but we could lower the rating if management is not able to maintain balanced operations without the use of reserves, resulting in a significantly weakened fund balance," the report said. "Although unlikely, we could consider a higher rating if reserves were to increase to the levels we consider very strong and the local economy were to become more robust, resulting in lower unemployment rate."
