Amended: Fitch Rates New Athens School District, IL's $1.8MM GOs 'A-'.

Business Editors

CHICAGO--(BUSINESS WIRE)--April 8, 2003

(This is an amended version of a press release dated April 7, which includes updated district population and per capita debt figures)

Fitch Ratings assigns an 'A-' rating to New Athens Community Unit School District No. 60 (the district), IL's $1,795,000 general obligation refunding bonds, series 2003, scheduled for negotiated sale today April 7, 2003 through L. J. Hart & Company. Dated May 1, 2003, the bonds mature serially Dec. 1, 2005 - 2011 and pay semiannual interest each June 1 and Dec. 1, commencing Dec. 1, 2003. Bonds maturing Dec. 1, 2006-2011 are subject to optional redemption beginning Dec. 1, 2005. Proceeds will refund the district's $1.7 million of outstanding series 1996 general obligation bonds. The bonds represent a general obligation of the district, payable from an unlimited ad valorem tax levied on all taxable property within the district.

The 'A-' rating reflects the district's quality academic performance, growing economy, consistently strong financial position and modest future capital needs. In addition, the district has maintained its facilities without reliance on debt financing, consequently maintaining a low direct debt burden with rapid amortization. Although the district's reserves allow some financial flexibility, cash-based accounting makes financial reporting less transparent.

Located approximately 40 miles east of St. Louis, New Athens CUSD #60 is located primarily within St. Clair County and has a district population of approximately 7,000. The district's 2002-03 enrollment equaled 613 and serves the city of New Athens and portions of four adjacent townships. Historically a rural area, the district benefits by being part of the St. Louis metropolitan area. Services lead St. Clair county in terms of employment (33% of total employment), followed by retail trade (20.5%), and government (19.3%). Unemployment rates for the district are unavailable, but Fitch estimates that the level is similar to the county (7.4% unemployment rate in January 2003) and marginally above the state (7.1%) and the national (6.5%) averages. Additionally, per capita income levels for the district also approximate the county averages which are 81.9% of the state and 87.7% of the national averages.

The district's financial performance benefits from fairly strong growth, as suggested by the 4.2% annual gain in the property tax base since 1998. Fitch anticipates that the property tax base will continue this growth pattern because of strong residential construction: two residential developments within the district have been completed recently and a third is under construction. The property tax base is diverse since the largest ten taxpayers comprise less than 1% of the total base. Residential uses represent 59% of the tax base, followed by commercial use at 18%, agricultural at 8% and industrial and mineral uses each at about 7%.

Financial operations for the New Athens School District are stable as the district reported an undesignated general fund balance of $1.6 million, or 34.8% of expenditures and transfers for fiscal 2002 (June 30 year-end), down slightly from $1.9 million or 52.9% of expenditures and transfers in fiscal 1999. Since fiscal 2000, state revenue support (which comprises 49% of the district's operating budget) has declined slightly each fiscal year, leading the district to draw on its general fund reserves. In with weakened state support, the district implemented timely cost control measures for the fiscal 2003 budget to stabilize financial operations and maintain strong fund balances. These measures included the reduction of staff and discretionary spending. The district does not have a formal fund balance policy, but its practice is to maintain at least three months of operating expenditures in cash reserves.

The district's few capital needs and stable enrollment contribute to the moderate direct debt burden which equals $314 per capita and 1.8% of full market value. The district has no overlapping debt. The district does not anticipate issuing any debt through at least 2007 as existing facilities are adequate and well-maintained. The district recently completed an addition to the junior high school.