header image

[Sign Up Now] to Receive Our FREE Daily SCVTV-SCVNews Digest by E-Mail

Inside
Weather


 
Calendar
Today in
S.C.V. History
March 28
1934 - Bouquet Canyon Reservoir, replacement for ill-fated St. Francis Dam & reservoir, begins to fill with water [story]
Bouquet Reservoir


[Fitch] – Fitch Ratings affirms the following ratings for the Santa Clarita Community College District (the district):

* $189.6 million general obligation (GO) bonds at ‘AA’;

* $19.8 million certificates of participation (COPs) at ‘AA-‘.

The Rating Outlook is revised to Stable from Negative.

 

fitchratings

 

 

SECURITY

The GO bonds are general obligations of the district, payable solely from the proceeds of ad valorem taxes, without limitation as to rate or amount.

The COPS are limited obligations secured by lease rental payments for the use of certain district properties, subject to abatement. They are additionally supported by the district’s covenant to budget and appropriate lease payments.

 

KEY RATING DRIVERS

IMPROVED REVENUE PROSPECTS: The revised Rating Outlook reflects recent revenue improvements for the district resulting from a recovering economy and improved state finances. Fitch expects that increased state revenue collections and resulting increases in the Proposition 98 funding guarantee will ease budgetary pressures for the district over the next several years. In addition, the state’s commitment to curtail revenue deferrals should improve liquidity.

OPERATING BALANCE RESTORED: The district finished the 2013 fiscal year with a small surplus and management expects positive results for the current fiscal year. Fund balances are adequate and remain well above state-mandated levels.

STRONG ECONOMIC BASE: The district benefits from its access to and participation in the broad Los Angeles economy and is well positioned to capture ongoing regional growth. Local employment and housing markets have seen steady improvements over the past several years and wealth and income levels for the district remain above average.

AFFORDABLE DEBT; SLOW AMORTIZATION: Overlapping debt levels are moderate, but amortization is slow due to the district’s extensive use of long-dated capital appreciation bonds (CABs).

 

RATING SENSITIVITIES

MAINTENANCE OF OPERATING BALANCE: Management’s inability to maintain operating balance would create downward pressure on the rating. Upwards rating movement is somewhat limited by the district’s reliance on state funding and would likely require sustained improvements in reserve levels to offset historical revenue volatility.

 

CREDIT PROFILE

The district is located in northern Los Angeles County along Interstate 5, approximately 35 miles from downtown Los Angeles, and includes the city of Santa Clarita and adjacent unincorporated areas.

 

IMPROVED REVENUE PROSPECTS

The district relies heavily on state funding for operations and has benefited from recent improvements in the state’s economy and revenue collections. Unrestricted general fund revenues for the district rose by 4.3% in fiscal 2013 following a 10.8% decline in 2012, and further increases appear likely. The governor’s proposed budget for fiscal 2015 projects an 11.4% increase in the Proposition 98 funding guarantee for K-14 schools as well as the repayment of prior year revenue deferrals. District funding has also been aided by the November 2012 approval of Proposition 30 by state voters, which increased statewide sales and income taxes on a temporary basis to fund education.

 

OPERATING BALANCE RESTORED

Increased revenues have helped the district to restore operating balance following several years of funding reductions. The district finished fiscal 2013 with a small general fund surplus following a deficit in 2012 and appears likely to add to fund balance in fiscal 2014 based on year-to-date results. Fitch expects that proposed increases in state revenues will help extend this positive trend for fiscal 2015.

Cash balances have also increased with the general improvement in the district’s financial position. The district issued $8 million in cash flow notes in 2013 in response to state revenue deferrals but has no plans for further short-term borrowing. Fund balance rose to 11.8% of general fund spending in fiscal 2013, well above the 5% state-mandated minimum.

 

STRONG ECONOMIC BASE

The tax base of the district is largely residential and has withstood the recent housing crisis better than many outlying communities in southern California. Taxable assessed valuation (TAV) for the district fell by 8% between 2009 and 2013 but returned to growth in 2014 with a 2.2% increase. Year-over-year home value increases of 23% through December 2013, as reported by Zillow, point to further gains as the residential real estate market continues to improve. Several large-scale residential developments underway or in the planning stages are also expected to boost the district’s population and TAV over the next several years.

Wealth and income indicators for Santa Clarita are well above county, state, and national averages, while poverty levels are much lower. Unemployment rates have historically compared favorably to state and national averages and peaked at a relatively low 7.8% in 2010. As of November 2013 the unemployment rate for the city of Santa Clarita was 5.7%, as compared to 8.3% and 6.6%, respectively, for the state and nation. Recent employment growth has also been robust with a 2.4% increase over the last 12 months, although employment levels remain below pre-recession peaks.

 

MANAGEABLE DEBT LEVELS; SLOW AMORTIZATION

Overlapping debt levels for the district are moderate at 3.2% of TAV, but amortization is very slow due to the district’s extensive use of long-dated capital appreciation bonds. Approximately 21% of outstanding principal and principal accreted through maturity is scheduled for repayment within the next 10 years. The district retains $45 million in GO authorization and is considering plans for issuance in late 2014.

The district is a participant in two state-sponsored defined benefit pension plans and faces ongoing increases in contribution rates to address current low funding levels. Funding for CalSTRS is a particular concern, as current contribution rates are substantially below the level required to amortize existing obligations. OPEB costs are funded on a pay-as-you-go-basis, resulting in a growing liability for these commitments, but the district’s unfunded liability was relatively low at $7.6 million as of 2013. Carrying costs for long-term obligations, including debt service and contributions towards retirement benefits, were affordable at approximately 15% of 2013 operating expenditures.

Comment On This Story
COMMENT POLICY: We welcome comments from individuals and businesses. All comments are moderated. Comments are subject to rejection if they are vulgar, combative, or in poor taste.
REAL NAMES ONLY: All posters must use their real individual or business name. This applies equally to Twitter account holders who use a nickname.

0 Comments

You can be the first one to leave a comment.

Leave a Comment


HIGHER EDUCATION LINKS
LOCAL COLLEGE HEADLINES
Thursday, Mar 28, 2024
The College of the Canyons Athletic Department will host a dedication ceremony to unveil the Michele Jenkins Softball Team Room in honor of the longtime board member and ardent softball program supporter’s nearly 40 years of service to the district.
Tuesday, Mar 26, 2024
California State University, Northridge is partnering with the Fernandeño Tataviam Band of Mission Indians and the Tataviam Land Conservancy to battle the impact of climate change in disadvantaged communities throughout the San Fernando Valley by establishing “urban forests.”
Monday, Mar 25, 2024
The Santa Clarita Community College District Board of Trustees will hold a special joint meeting with the Associated Student Government in open session from 2 p.m. to 3:30 p.m.
Wednesday, Mar 20, 2024
Holly Hitt-Zuniga has been selected to represent COC and the National Science Foundation’s Center for Renewable Energy Advanced Technological Education in Iceland.
Wednesday, Mar 20, 2024
When you enter the main floor of the west wing of the California State University Northridge library, you’ll soon notice a new mural blending art, nature and the Indigenous history that the campus sits on.
Keep Up With Our Facebook

Latest Additions to SCVNews.com
Local nonprofit Fostering Youth Independence is seeking “Allies” to support Santa Clarita youth who are aging out of the L.A. County foster care system.
April 16: FYI Seeks Volunteers To Pair With Local Foster Youth
The Los Angeles County Department of Public Health today unveiled the latest L.A. County Health Survey, which gathers vital data on health behaviors, conditions, neighborhood settings, and the needs of L.A .County residents, informing future public health policies and programs.
Public Health Unveils the 2023 L.A. County Health Survey Findings
Due to the projected rain forecast, Eggstravaganza will now be held indoors at the Canyon Country Community Center beginning promptly at 10 a.m. on March 30.
March 30: Eggstravaganza Now Being Held Indoors at Canyon Country Community Center
To support the mental health of California's young people, the California Department of Public Health awarded $25 million to 28 tribal and community-based organizations across the state.
California Announces $25 Million in Awards for Youth Mental Health
The College of the Canyons Athletic Department will host a dedication ceremony to unveil the Michele Jenkins Softball Team Room in honor of the longtime board member and ardent softball program supporter’s nearly 40 years of service to the district.
April 16: COC to Host Michele Jenkins Team Room Dedication Ceremony
PFLAG Santa Clarita has announced the establishment of the Peggy and Jeff Stabile PFLAG SCV Scholarship. The scholarship will provide financial assistance to LGBTQIA+ students pursuing higher education and committed to advocating for LGBTQIA+ rights and promoting diversity and inclusion.
PFLAG SCV Announces Stabile PFLAG Scholarship
1934 - Bouquet Canyon Reservoir, replacement for ill-fated St. Francis Dam & reservoir, begins to fill with water [story]
Bouquet Reservoir
The California Department of Public Health launched the “Never a Bother” campaign, a youth suicide prevention public awareness and outreach campaign for youth, young adults, and their parents, caregivers, and allies.
California Launches New Youth Suicide Prevention Campaign
The Santa Clarita Master Chorale invites the community to "Let the Sunshine In," a delightful evening of food, wine and song at the annual Cabaret & Cabernet fundraising benefit.
April 20: Santa Clarita Master Chorale’s Cabaret, Cabernet Fundraiser
The Los Angeles County Department of Public Health cautions residents who are planning to visit the below Los Angeles County beaches to avoid swimming, surfing, and playing in ocean waters:
March 27 Ocean Water Warning
As an integral ingredient necessary to help the Santa Clarita Valley to flourish, feedback from the business community is the secret sauce for achieving great things.
SCVEDEC Asks For the Business Community’s Opinion on Santa Clarita
Raise your heart rate while raising funds for the Santa Clarita Sister Cities Dollars-for-Desks campaign to provide school desks for students in Sariaya, Santa Clarita's Sister City in the Philippines.
April 13: Sister Cities Zumba-thon Fundraiser
Remo, Inc. is is the world's leading manufacturer and developer of synthetic drumheads and shells. They’ve been in business for 60 years
SCVEDC Company Spotlight: Drumming Up Big Business with Remo, Inc.
California State Assemblywoman Pilar Schiavo (D-Chatsworth) and Assemblyman James Ramos (D-Highland) have introduced AB 3074 the "School or athletic team names: California Racial Mascots Act."
Schiavo Introduces Bill to Prohibit ‘Derogatory’ School Mascot Names
Los Angeles County’s Justice, Care and Opportunities Department  in collaboration with Local Initiatives Support Corporation Los Angeles is proud to announce the 2nd Annual Pitch Competition for the cohorts of JCOD's Incubation Academy.
March 28: JCOD Incubation Academy Helps Grassroots Non-Profits For the Second Year
Children’s Bureau is seeking foster families and now offers two virtual ways for individuals and/or couples to learn how to help children in foster care while reunifying with birth families or how to provide legal permanency by adoption.
April 18: Children’s Bureau Hosts Virtual Orientation
The Sunburst track was constructed in 1887 by the Southern Pacific Railroad and was a part of the main line running between San Francisco and Los Angeles.
Enjoy Spring With a Ride On The Sunburst Track
California State Superintendent of Public Instruction Tony Thurmond hosted a Personal Finance Summit today where he announced his support for Assembly Bill 2927 (McCarty), legislation that would require a personal finance education course for California high school graduation.
State Superintendent Announces Support for Personal Finance Graduation Requirement
1847 - Probable birth date of Pico Canyon oil driller Charles Alexander Mentry [story]
C.A. Mentry
The first Music Jam Session at The MAIN was held on Thursday, Feb. 22 and was a hit. Come out and join in for the next one on Thursday, March 28 7 p.m.-9 p.m.
March 28: The MAIN to Host Musicians’ Jam Session
Los Angeles County Inspector General Max Huntsman of the Office of Inspector General has issued a report entitled "Tenth Report Back on Implementing Body-Worn Cameras in Los Angeles County."
Office of Inspector General Issues Latest Report on LASD Body Cams
College of the Canyons women's tennis played to a convincing 7-2 conference win over Ventura College on Moica to strengthen its potential playoff resume.
Canyons Closes Out Ventura 7-2 in Final Home Match
Join the Santa Clarita Valley Chamber of Commerce with the Latino Business Alliance at the Cinco de Mayo Networking Celebration on Tuesday, May 7.
May 7: Latino Business Alliance Cinco de Mayo Celebration
SCVNews.com