Approximately $124 Million in GO Debt Affected
Primary & Secondary Education
General Obligation Bonds, Election of 2006, Series C
Expected Sale Date
NEW YORK, Jun 28, 2011 -- Moody's Investors Service has assigned an Aa2 rating to Yuba Community College
District's Series General Obligation bonds, Election of 2006, Series C. The
proceeds will be used for renovation projects, new construction, and to prepay
prior district borrowings. The bonds are secured by the district's unlimited
property tax pledge.
The rating reflects the North Central Valley District's sizable tax
base, continued low debt burdens, and stable finances. Also reflected are the
average socioeconomic profile and income levels of district residents relative
to state and national averages.
"Large tax base
"Manageable debt position
"Below average reserves
"Very slow payout of debt
STRONG ASSESSED VALUE AND POPULATION GROWTH PATTERN IN RESIDENTIAL TAX BASE;
AVERAGE SOCIOECONOMIC PROFILE
The Yuba CCD provides post-secondary educational services to the Counties of
Colusa, Sutter, and Yuba, as well as portions of Butte, Glenn, Lake, Placer, and
Yolo Counties. Sutter County composes the largest percentage of the tax base at
31.6% of assessed valuation. With the decreases of 1.9% and 3.8% in 2010 and
2011 respectively, average Assessed Value (AV) growth within the District is
modest with 5-year average annual growth of 4.2%, between 2006 and 2011. The
District's property tax base is diverse, with top ten taxpayers accounting for
5.2% of total AV in 2011, and is primarily residential by land use at
approximately 80%% of total parcels.
Socioeconomic indicators are slightly below state and national
averages. District-wide income data is not available, though Colusa, Sutter, and
Yuba Counties, which are completely within the District, and portions of Butte,
Glenn, Lake, Placer, and Yolo Counties, all display income levels that are
relatively below the State average. Moody's notes that the socioeconomic profile
has relatively increased to the state average in the more recent 2005 American
Community Survey data (Census bureau), and that further change is likely given
the region's affordability to other areas in California. Employment is slightly
more reliant on construction and agriculture, but is generally not
concentrated given its large geographical size.
STABLE FINANCIAL PROFILE; SUBSTANTIAL LONG-TERM GROWTH IN ENROLLMENT EXPECTED
The District has maintained consistent and moderate general fund reserves, and
is expected do so going forward given its conservative fiscal practices and
steady growth in enrollment. The General Fund balance in FY 2010 was $4.59
million (8.1% of GF revenues). In the past fund balances have been above this
level (10.7% in FY 2005 and 11.3% in FY 2004). Enrollment has been increasing
steadily since 2006 with FTE's increasing from 7,012 in 2006 to 8,505 in
2010.This trend is continuing in 2011 with another increase expected in 2012.
For the current fiscal year (2011), the District projects an increase in GF
balance to approximately $6.65 million or 14.4%, although much of this increase
is due to approximately $3.0 million one-time revenues. Without these
one-time revenues the district would have likely suffered a small operating
deficit which would have lowered the GF balance to $4.15 million or 9.0% of
revenues. The tentative budget, which is conservative, indicates a significant
drawdown of the reserves to just 6.3% of revenues. Weather the high point of
14.4% or a low point of 6.3%, these balances remain below the median of
similarly rated community college districts, and any further declines would
place significant downward pressure on the district's rating
The District paid $1.5 million in other post-employment benefits for its
retirees on a pay-as-you-go basis in FY 2010. The District has conducted an
actuarial study for its Post-Employment Benefits (OPEB) and reports an actuarial
liability of $34.7 million.
RELATIVELY LOW DIRECT DEBT BURDEN POST-ISSUANCE; CAPITAL PLAN CONSISTS OF NEW
CONSTRUCTION AND RENOVATIONS
The current offering is the second issuance of a 2006 voter-approved $190.0
million GO bond authorization, and will have a 40 year maturity period. The
outstanding GO issuances, including the current series will pay off a very small
portion of the principal in the first ten years. District post-issuance will be
very low at 0.5%, and the overall debt burden will be 2.5%. The District has no
plans to seek new voter approved debt.
What could move the rating-UP
-Trend of significant growth in tax base assessed valuation
-Significant increase in the District's reserves
What could move the rating-DOWN
-Protracted decline in the District's assessed valuation
-Significant deterioration in the District's reserves
Assessed value, FY 2011: $25.4 billion
Average annual growth, assessed value, 200-: 4.2%
General Fund balance, FY 2010: $4.59 million (8.1% of revenues)
Sutter County Median family income, 2000 census: $44,330 (83.6% of State)
Sutter County Per capita income, 2000 census: $17,428 (76.7% of State)
Full-time equivalent students, FY 2010: 8,505
Direct debt burden: 0.5%
Overall debt burden: 2.5%
Ten-year principal payout: 1.9%
The principal methodology used in this rating was General Obligation
Bonds Issued by U.S. Local Governments, published in October 2009.
Information sources used to prepare the credit rating are the following: parties
involved in the ratings, parties not involved in the ratings, and public
Moody's Investors Service considers the quality of information available on the
credit satisfactory for the purposes of assigning a credit rating.
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MOODY'S ASSIGNS Aa2 RATING TO YUBA CCD GO BONDS
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