Fitch Affirms Madison Parish School Board, LA's GOs at 'BBB'; Outlook Stable

NEW YORK--(Business Wire)--
In the course of routine surveillance, Fitch Ratings has affirmed the 'BBB'
rating on Madison Parish School District (Parish Wide), LA's (the district)
approximately $17.5 million in general obligation (GO) bonds, series 2005. The
Rating Outlook is Stable. The GO bonds are direct obligations of the district,
secured by and payable from an unlimited ad valorem tax levied against all
taxable property in the district.

The 'BBB' rating reflects the district's healthy reserve levels, satisfactory
operating results with surpluses achieved in each of the prior three fiscal
years, and absence of additional borrowing plans. The rating also considers the
district's high debt burden, concentrated tax base, limited economy, very low
wealth levels, and declining enrollment.

The district continues to maintain healthy reserve levels, closing fiscal 2008
with an unreserved fund balance equal to $3 million or 20% of total spending.
Additional reserves totaling approximately $1.2 million have been established by
the district for salaries and maintenance expenses. The district anticipates
closing fiscal 2009 with $400,000 to $500,000 in net surplus to add to the
unreserved fund balance. The district's budget for fiscal 2010 is balanced
without appropriating existing reserves. The state's minimum foundation program
(MFP) is the district's primary funding source accounting for 78% of operating
revenues in fiscal 2008. According to the district, the MFP budget letter from
the department of education indicates that the district will receive
approximately $1 million in MFP funding above the amount budgeted for fiscal
2010. The district also levies a 2.5% sales tax which accounts for approximately
17% of total revenue. Sales tax collections have fluctuated somewhat over the
past several years. The district recorded a 35% increase in 2008 associated with
construction of several natural gas pipelines, but declined by 23% the following
year. The district is responsible for reimbursing the Louisiana Department of
Education approximately $340,000 stemming from a review of the district's
expenditure of certain grant funds. According to the district, the questioned
costs occurred under a prior management team and internal auditing processes
have since been modified to prevent similar occurrences in the future.

Madison Parish (the parish) is located in northeast Louisiana along the
Mississippi River. The population of the parish has declined by 14% since 2000
to 11,790 in 2008. The district attributes the declining population to the
limited nature of the economy and lack of available housing. The parish economy
is anchored by commerce, agriculture and healthcare. The parish unemployment
rate, historically well above state and national averages, was 9% as of May 2009
compared to 6.3% statewide. Leading wealth indicators are also well below state
and national averages. Enrollment, which helps determine the districts MFP
funding, has declined on average 3.5% annually since 2005 to 1,906 students in
2009. Taxpayer concentration is an additional credit concern. The largest
taxpayer is Gulf South Pipeline Co. LP accounts for about 28% of the district's
$67.4 million tax base, and the top 10 taxpayers, who include three barge
companies, collectively comprise a very high 55% of total assessed valuation
(AV). A tax base reassessment and an increase in mineral, oil, and gas valuation
contributed to a 47% increase in AV in 2008. However, AV growth had averaged
less than 2% for fiscal 2005-2007.

Debt levels for the district are above average with net direct debt per capita
at $2,351 or 6.1% of market value. The principal pay-out rate is below average
at 29% in 10 years. The district reportedly has no additional borrowing plans or
major capital needs in the near to intermediate term.

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, New York
Jaissy Lorenzo, 212-908-9167
Michael Rinaldi, 212-908-0833
Cindy Stoller, 212-908-0526 (Media Relations)
cindy.stoller@fitchratings.com

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