Fitch Rates Manatee County School Board's (Florida) $46MM COPs 'A'; Outlook Stable

TAMPA, Fla.--(Business Wire)--
Fitch Ratings assigns an 'A' rating to the Manatee County School Board,
Florida's (the district) approximately $46 million certificates of participation
(COPs), series 2009. The COPs are tentatively scheduled to price via negotiation
during the week of May 11, 2009. COP proceeds will be used to finance district
infrastructure, including a new elementary school and a maintenance facility.
Concurrently, Fitch affirms the 'A' rating on the district's $140 million in
outstanding COPs and the 'A' rating the district's $117 million in outstanding
sales tax revenue bonds. The Rating Outlook on both is Stable.

The 'A' rating on the COPs reflects the sound legal features of the master lease
agreement and the general credit characteristics of the district including low
debt levels, a somewhat limited tourism-based economy, and adequate financial
reserves. Payments under the lease are subject to appropriation.

The COPs are secured by lease payments made by the district to the trustee, as
assignee of the Manatee County School Board Leasing Corp., which is a
not-for-profit corporation created to assist the district in lease-purchase
financing. The obligation of the district to make lease payments is limited and
payable solely from funds appropriated by the district from available revenues.
The 2009 COPs are being issued pursuant to a master lease agreement, which
provides strong incentives for appropriation. In the event of non-appropriation,
the board must surrender all leased facilities to the trustee. Currently,
approximately 15% of the district's facilities are included in the lease.

Financial flexibility has deteriorated over the last several years, driven by
increasing operational costs and state funding reductions. The general fund
unreserved fund balance fell to 1.5% of spending at the close of fiscal year
2008, its lowest level in five years. However, Fitch believes district officials
have taken meaningful measures to reduce spending substantially in fiscal year
2009 to address a $30 million state funding cut. Officials expect to add at
least $2 million to the general fund balance in fiscal 2009, increasing reserves
to slightly more than 3% of spending. State funding levels are expected to
increase slightly in fiscal 2010 based on appropriation bills currently being
debated in the State legislature which incorporate approximately $14 million in
federal stimulus revenue for the district. Officials are working to develop $25
million in recurring cost reductions over the next three fiscal years to
facilitate structural budgetary balance in the absence of federal support. A
portion of the reductions are planned to reduce the level of dependency on
transfers to the general fund from the capital outlay fund for maintenance
purposes given the expectation of reduced revenues in that fund. Downward rating
pressure could result if the district is not successful in its plans to regain
moderate reserve levels.

The sales tax revenue bonds are secured by a pledge of proceeds of a
one-half-cent discretionary sales surtax for district purposes approved by
referendum in May 2002 and in effect until 2018. Fiscal 2008 results show
maximum annual debt service (MADS) coverage of 1.37 times (x). Year-to-date
revenues are down 4.6% from a year prior which would moderately reduce coverage
to 1.30x. While Fitch does expect further deterioration of pledged revenues due
to the present economic downturn, Fitch expects that coverage levels will remain
adequate.

Overall debt is low with rapid amortization. The district is in the process of
revising its five-year capital improvement plan (CIP) downward to reflect
declining capital outlay and sales tax revenues available to fund projects.
Although tax base decline was minimal in fiscal 2009, officials are planning for
a 20% decline in FY 2010 which will substantially decrease revenues available
for capital projects. Many of the district's $464 million projects identified in
the FY 2008-2012 CIP will be delayed. Officials do expect to issue $60-$70
million in additional COPs in the next year for capital projects deemed
essential.

Manatee County, which is coterminous with the district, has an estimated 2007
population of 315,108 and is located on the western coast of central Florida,
south of Tampa. Fitch rates the county's general obligations 'AA+' with a Stable
Outlook. The district has 47 schools and approximately 42,000 students. While
tourism-related activities and services dominate the economic characteristics of
the economy, some diversification is derived from manufacturing, healthcare and
retail. In addition, residents have access to the greater Tampa Bay metropolitan
area for employment opportunities. The county's jobless rate for February 2009
was 11%, above the state (10.8%) and national (8.1%) averages and more than
double the rate of one year prior. Wealth indicators are slightly above state
levels.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings
Kelly McGary, 813-224-0492, Tampa
Lindsay Trzaska, 212-908-0289, New York
or
Media Relations:
Cindy Stoller, 212-908-0526, New York
Email: cindy.stoller@fitchratings.com

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