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Fitch Rates $12MM Washington Unified School District, CA GO Bonds 'A+'.

SAN FRANCISCO San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden  -- Fitch Ratings Fitch Ratings

An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris.
 assigns an 'A+' rating to $12 million Washington Unified School District A unified school district is a school district which includes both primary school (kindergarten through middle school or junior high) and high school (grades 9-12). In Illinois, these districts are called unit school districts.  (Yolo County, California Yolo County is located in the northern part of the U.S. state of California, bordered by the counties of Sacramento, Solano, Napa, Lake, Colusa, and Sutter. Woodland is the county seat. ) election of 2004 general obligation bonds, series B. In addition, Fitch affirms the 'A+' rating on roughly $48.2 million general obligation bonds outstanding. The Rating Outlook is Stable.

The bonds are expected to sell via negotiation led by Stone & Youngberg during the week of Oct. 30. The bonds are secured by the district's full faith and credit unlimited ad valorem tax Ad Valorem Tax

A tax based on the assessed value of real estate or personal property. In other words ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenues for state and municipal governments.

The 'A+' rating reflects Washington Unified School District's (the district) low direct debt level, strong population and assessed valuation growth, rising school enrollment, and historically healthy fund balances. The district primarily serves the fast growing city of West Sacramento. These factors are somewhat offset by concerns related to ongoing operating and capital pressures associated with growth and slow debt amortization. The district has experienced turnover at the senior management level, although disruptions in operations appear to be minimal. In addition, the current administration is in the process of implementing several measures aimed at achieving budget balance and generating increased fiscal efficiencies, which Fitch views favorably.

Located in the city of West Sacramento, the district covers a 23-square mile area in eastern Yolo County along the west bank of the Sacramento River and opposite the city of Sacramento. With a population of 43,000, the district provides services to over 7,100 students enrolled in 13 public schools located at 11 sites. Historically, enrollment growth has been steady, growing 12% from 2001-2006. Current projections, which have been revised downward from prior year forecasts, are anticipated to reach approximately 7,500 students by 2011 as the city of West Sacramento continues to be built out. The district has recorded significant tax base growth, increasing 15% annually over the past six years. The local economy is essentially residential in character with a good mix of commercial and industrial businesses. The city's labor force and employment opportunities have consistently improved since a significant decline in 2000, and its unemployment rate is now on par with California's.

Financial operations are marked by healthy general fund reserves that have averaged around 10% of expenditures, transfers out, and other uses over the past four years. The district incurred, however, an operating deficit in fiscal 2004 and essentially break-even results in fiscal 2005. Another drawdown Drawdown

The peak to trough decline during a specific record period of an investment or fund. It is usually quoted as the percentage between the peak to the trough.

 in general fund reserves is projected for fiscal 2006, although the unreserved balance is expected to represent a still favorable 7% of operating expenses Operating expenses

The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted.
 and transfers out. While the district has budgeted a $1.8 million surplus for fiscal 2007, labor negotiations are still underway creating some uncertainty as to the extent of the financial impact on district finances. The district's new management is implementing a number of initiatives designed to improve revenue collections, reduce expenses, and achieve budget balance.

This is the second installment in a $52 million bond measure approved by 69% of district voters in March 2004 under California's Proposition 39 election procedure. Bond proceeds, supplemented with state matching funds and developer fees, will fund the construction of a new high school. The first installment (approximately $40 million) was issued in 2004. Including the full authorization, the direct debt level is low at $1,471 per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. , or 1% of market value. However, as a result of the overlapping debt Overlapping Debt

The debt of a political entity such as a state where its tax base overlaps the tax base of another political entity such as a city within the state.

If the issuer of a municipal bond has overlapping debt, it should be considered.
 of local taxing entities, the overall debt level is above average at $5,500 per capita, or 5% of market value. The average tax rate levied to repay all general obligation bonds outstanding, including this issue, is expected to be $55 per $100,000 of assessed valuation, assuming a conservative 6% future annual assessed valuation growth rate. Payout is slow, with 31% of the district debt repaid in 10 years. Additional borrowing is likely as the district will go back to the voters in November to reallocate Verb 1. reallocate - allocate, distribute, or apportion anew; "Congressional seats are reapportioned on the basis of census data"

allocate, apportion - distribute according to a plan or set apart for a special purpose; "I am allocating a loaf of
 $7 million from the 1999 authorization to meet increased costs associated with the construction of a new high school. The district's board recently approved a $252 million capital improvement plan through fiscal 2016 which will require funding from a multiplicity of sources.

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Publication:Business Wire
Date:Oct 26, 2006
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