Bangkok--11 May--Standard & Poor's
Standard & Poor's Ratings Services raised its school issuer credit rating (ICR) on Tooele County School District Board of Education, Utah's (the district) outstanding general obligation (GO) debt to 'AA-' from 'A+'. At the same time, Standard & Poor's affirmed its 'AAA' enhanced rating on the district's GO debt. In addition, Standard & Poor's raised its underlying rating (SPUR) on the district's outstanding appropriation obligations to 'A+' from 'A'. The raised ratings reflect the district's good financial management, as evidenced by its maintenance of available general fund balances at what we consider to be strong levels relative to expenditures during a period of strong growth, and the adoption of a minimum undesignated general fund balance policy that we think will reinforce this pattern. Finally, Standard & Poor's assigned its 'A+' long-term rating, with a stable outlook, to Tooele County School District Municipal Building Authority, Utah's (the authority) series 2009 lease revenue bonds, issued for Tooele County School District Board of Education.
The district's GO bonds are secured by both the full faith and credit of the state of Utah under the Utah School Bond Guaranty Act and the district's obligation to levy ad valorem property taxes without limitation as to rate or amount. The series 2009 lease revenue bonds are limited obligations of the authority. Under a master lease agreement, the authority has leased the land and a to-be-constructed 93,400-square-foot facility to the district. Securing the bonds are the lease payments owed by the district under succeeding optional annual renewals of the lease. The primary source of lease payments are per-student revenues derived from the district's operations.
Additional strengths of the district, in our opinion, include its economic base that participates in the Salt Lake City regional economy and shows strong income and wealth indicators and good financial policies and practices.
Constraining credit quality is what we think will be the need to develop new facilities to accommodate student population growth, although management indicates that the district has caught up with conventional classroom capacity needs for the next three to five years.
Proceeds will fund the construction of a new community learning center, which will address special program capacity constraints and the need for modernization of facilities for vocational and technical education and adult education.
"We believe the district will be able to navigate a more challenging state funding environment and a decline in enrollment without a significant change to available balances," said Standard & Poor's credit analyst Chris Morgan.
Complete ratings information is available to RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Chris Morgan, San Francisco (1) 415-371-5032
Sussan Corson, New York (1) 212-438-2014
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
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