Shoreline Schools completes $80 million bond sale

The Shoreline School District this week successfully sold $80 million in general obligation bonds from the 2010 issue approved by voters last February for the modernization/replacement of Shorecrest and Shorewood High Schools.

The bond sale will produce funds when needed to begin the Shorecrest and Shorewood construction projects next year, while achieving the tax collection amounts communicated to voters. It was noted by the District's consultants that it is highly unusual to be able to sell this large quantity of bonds without increasing the overall tax collection in the District.

The District benefited from its strong bond rating and interest rates at near-historic lows in making the sale this week with the assistance of Seattle-Northwest Securities. Although most bonds are sold to large institutional investors, Seattle-Northwest was able to make bonds available to retail investors in the District.

Standard & Poor's Ratings Services has raised its school district issuer credit rating (ICR) to 'A+' from 'A' on the Shoreline School District. S&P says its raised rating "reflects the district's improved financial performance as a result of management cost adjustments and strong voter support for levy measures."

Moody's Investors Service has affirmed its 'Aa2' underlying rating for the District.

"After a period of negative unreserved general fund balances, the district has been able to improve its financial performance beginning in fiscal 2008. The financial recovery follows the new management's actions to adjust staffing levels given declining enrollment, the closure of two elementary schools, and other program reductions and adjustments," notes Standard and Poor's credit analyst Bea Chiem.

S & P said the stable outlook on the long term ratings for Shoreline reflects its "expectation that the district will continue to adequately manage its spending in light of its declining enrollment trend and expected state revenue reductions. Over the intermediate term, we may raise the rating if the District can maintain good fund balances and structurally balanced budgets."

In its own report, Moody's noted the District's financial position improved significantly in recent years, streamlining operations by closing underutilized facilities, enacting new financial procedures, conservatively managing staff levels, and reducing non-essential programming.

The services said their ratings reflect the district's:

• Strong wealth and income indicators supported by its central location
• within the Seattle-Bellevue-Everett economy;
• Diverse, residential property tax base; and
• Moderate overall debt levels of 3.2 percent of assessed value (AV).

The new bonds are being issued from the District's 2010 authorization for the modernization / replacement of the District's Shorecrest and Shorewood high schools. An improved rating makes bonds more attractive to investors.

--Shoreline School District