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District NY GO Debt Rating Raised To 'A-' From 'BBB+'

Niagara Falls City School District, NY GO Debt Rating Raised To 'A-' From 'BBB+'
"I am proud of the work our administrative team does to achieve this rating. Along with the continued support of my fellow board members." - Bob Restaino
"We have worked hard and have never in the last 30 years had a bond rating of A. " - Mark Laurrie

NEW YORK (S&P Global Ratings) Oct. 19, 2018--S&P Global Ratings raised its rating on Niagara Falls City School District, N.Y.'s general obligation debt outstanding one notch to 'A-' from 'BBB+'. At the same time, S&P Global Ratings raised its rating on the district's certificates of participation
(COPs) outstanding to 'BBB+' from 'BBB'. S&P Global Ratings assigned its
'BBB+' rating to the COPs based on the application of its "Issue Credit Ratings Linked To U.S. Public Finance Obligors’ Creditworthiness" criteria, published Jan. 22, 2018. The outlook is stable. Lastly, S&P Global Ratings withdrew its rating on the district's 1998 COPs, as these bonds are no longer outstanding.

"The upgrades reflect several factors; however, the most compelling is the recent growth in fund balance," said S&P Global Ratings credit analyst Lauren Freire.

Over the past three years, the district has added $9.7 million to its reserves, which at $16.2 million or 12% of expenses is the highest fund balance the district has maintained over the past 20 years. Management has successfully managed rising costs, with a limited tax base, while experiencing enrollment growth and the early termination of an expected revenue stream from the Seneca Nation. We believe that the active management team and its prudent budgetary practices have improved the district's financial position over the past few years.

The 'A-' rating reflects our view of:
• A history of positive year-end operating results, that are expected tocontinue into 2018;
• Strong total fund balance levels and budgetary flexibility; and
• A moderate debt level, however, with rapidly amortizing debt.
The above-mentioned factors are offset by the district's:
• High level of exposure to state aid; and
• Limited local economy with low-to-adequate wealth levels.

The stable outlook reflects our expectation that the rating will not change during the outlook period. The stability and growth in state aid further stabilize the rating. The district's proactive and conservative management team provides necessary confidence that the district will continue to manage ongoing expenses with corresponding revenues despite a weaker economy.
If the district's financial performance were to remain positive, resulting in higher reserves, coupled with an improving tax base and economic indicators, we could raise the rating.

If the district were to draw on its fund balance and maintain reserves at a level we consider low, we could lower the rating.

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website.