Shelby County Board Of Education, AL Series 2011 Warrants Rating Raised To 'AA-' From 'A' On Application Of Criteria

DALLAS (S&P Global Ratings) Dec. 6, 2018--S&P Global Ratings has raised its 
long-term rating on Shelby County Board of Education (BOE), Ala.'s series 2011 
school tax warrants to 'AA-' from 'A', based on the application of its 
criteria "Issue Credit Ratings Linked To U.S. Public Finance Obligors' 
Creditworthiness," published Jan. 22, 2018. The outlook is stable. 

The 'AA-' rating reflects our view of the board's:
  • Growth within the local economy, which benefits from proximity to Birmingham and stable resident wealth levels;
  • Modest annual enrollment growth;
  • Stable financial performance and maintenance of available reserves; and
  • Manageable debt profile.
Partially offsetting the above strengths, in our view, are the board's stable 
yet below-average fiscal reserve levels and lack of formalized long-term 
financial planning or debt, reserve, and investment management policies. 

"The stable outlook reflects general stability within the board's economy, 
which is bolstered by its close proximity to the Birmingham-Hoover 
metropolitan statistical area, enrollment, and finances," said S&P Global 
Ratings credit analyst Andy Hobbs. 

The board's manageable debt burden also contributes to the stable outlook. We 
don't expect to change the rating within the two-year outlook horizon. 

We could raise the rating if solid and consistent positive financial 
performance yields growth in reserves on a budgetary basis that is sustained 
and if the board strengthens its fiscal management practices.

We could lower the rating if the board experiences operating deficits or weak 
financial performance leading to decreased reserves.