May 10 Citing concerns about the Sacramento City
Unified School District's reserves, Fitch Ratings cut on Friday
the California district's general obligation bond rating to
A-plus from AA-minus, a move affecting about $313.7 million of
Fitch also lowered $33.5 million of the district's
certificates of participation to A from A-plus.
Fitch in a statement said its downgrades reflect the
district's "weak financial reserve position and willingness to
spend down reserves to low levels during periods of state
The district serves California's capital. Its economy has
struggled due to the housing downturn and spending cuts imposed
by the state government to balance its books in recent years.
"The district has aggressively trimmed expenditures and is
expected to return its budgets to structural balance over the
next year or two with the stabilization of the state funding
environment. However, Fitch does not expect reserves to improve
for some time," the rating agency said.