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MOODY'S RELEASES PUBLICATION ON THE FINANCIAL STATUS OF CALIFORNIA SCHOOL DISTRICTS

 NEW YORK, Feb. 18 /PRNewswire/ -- Effective yesterday, Moody's Investors Service has commented on the credit impacts of recent state budget provisions on California school districts. Moody's concluded that, in general, school districts have fared relatively well in the state's budget process compared with other levels of local government. School districts have received a constant level of funding compared to city, county and special districts whose revenue bases have been irrevocably reduced. Accordingly, while school district management has had to contend with the financial pressures resulting from stagnant operating revenues, districts can expect to financially benefit from a future recovery at the state level. The report concludes that the creation of state loans, to be repaid through future state apportionments and the reallocation of property tax revenues from other local governments, results in increased near-term operating risks for school districts.
 The publication also includes rating reviews of the school districts which received unfavorable certifications in the California Department of Education's memorandum on district interim reports. The certifications refer to a district's ability to meet its financial obligations, and is a tool provided by the California Education Code through which oversight boards monitor the financial status of school districts. Moody's has long-term debt ratings assigned to four of the 20 school districts which received unfavorable certifications. In an evaluation of these districts. Moody's found that financial strain warranted downward rating revisions to two of the districts. However, one of the districts (Coachella Valley Unified School District) had its rating revised from Ba to Baa reflecting improved financial flexibility due, in part, to increased fiscal oversight provided by Assembly Bill 1200. Please refer to the report entitled Moody's Comments on the Financial Status of California School Districts dated Feb. 18, 1993, for further details.
 -0- 2/18/93
 /CONTACT: Ronald L. Junker, senior analyst, Far West Regional Ratings Group of Moody's Public Finance Department, 415-274-1736/


CO: ST: California IN: SU: RTG

KD-OS -- NY068 -- 7993 02/18/93 14:44 EST
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Date:Feb 18, 1993
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