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School
District Issues Bonds
Credit is Upgraded
 JIM STRATTON
LCUSD Superintendent
During the summer, La Cañada
Unified School District issued and
sold $5.8 million of bonds related to the $25 million general obligation
bond approved by voters in March of
2004, according to a press release
from LCUSD.
During the bond underwriting
process, the District’s credit rating
was upgraded by Standard & Poor’s
(S&P) from AA- to AA. The
upgraded rating was assigned to the
District’s new bond issue as well as
to all of its outstanding general obligation
bonds.
Savings to local taxpayers from
the upgrade is estimated at 12 basis
points (.0012%) over the life of the
$5.8 million bond, which represents
the spread between the former rating
and the upgraded rating on July
17, 2008.
Board member Scott Tracy and
Superintendent Jim Stratton made
presentations to the rating agencies
in June as part of the bond issuance
process. Stratton indicated that “the
rating agencies were very impressed
with the District’s financial priorities
and results. The analysts specifically
cited the board’s frequent
budget monitoring, conservative
accrual policies for employee retirement
expenses, maintenance of a
lease-interruption fund, and low
overall indebtedness.”
Tracy added, “Notwithstanding
limited State funding and competing
needs, this board has demonstrated
effective local control of
District finances.”
Both S&P and Moody’s
Investors Service (Moody’s rating
remained unchanged at Aa3) listed a
number of District strengths to support
their rating assignments,
including the community’s above average
socio-economic profile,
strong growth in assessed property
values, proximity to downtown Los
Angeles, and participation in the
deep Los Angeles regional economy.
Additionally, S&P and Moody’s
commended the District for its conservative
financial management,
strong financial position, sound
financial operations, and revenue
flexibility provided by community
donations and lease income.
Proceeds from the current bond
sale will continue to finance capital
improvement projects throughout
the District, with particular emphasis
on further major renovations at
LCHS and new multi-purpose
buildings at Palm Crest and
Paradise Canyon elementary
schools.
The latest round of bonds was
issued at an all-in rate of 4.43%,
which is below the estimated rate
provided to the electorate in the
2004 bond measure. The District
issued the initial bond series of $15
million in July 2004. The remaining
unfunded $4.2 million of the $25
million bond is expected to be
issued during the first quarter of
2009.
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