LOS ANGELES— Standard & Poor's revised its outlook for general obligation bonds issued by a Santa Barbara County, Calif. elementary school district to stable from negative on a return to "balanced operations."
S&P also affirmed its A-plus rating ahead of Los Olivos Elementary School District's plans to issue $6.7 million in GOs.
"The rating actions are based on our view of the district's return to balanced operations in fiscal 2016 due to the district's closure of its charter school and to its 'basic-aid' status, which brings in significant additional revenues," said Standard & Poor's credit analyst Jen Hansen.
Funding for basic aid districts comes entirely from local property taxes, but the districts also retain any excess property taxes in their district. The switch in 2013-14 to a Local Control Funding Formula doesn't impact most districts previously defined as "basic aid."
The district plans to use the series B bonds to finance school construction and improvements to district facilities. The proceeds of the refunding bonds will refund outstanding bond issues.
S&P affirmed an A-plus rating on the school district's long term rating and underlying rating on its outstanding GO debt.
The affluence of the Santa Barbara area and the change to "basic aid" funding, which limits the district's exposure to enrollment losses, mitigates the impact of diminished reserves and enrollment swings, which are both expected to stabilize in the upcoming year, Hansen said.
