Carroll County School District

Carroll County is located in northwest Georgia with Alabama to its western border and metropolitan Atlanta immediately to the east. Similar to the surrounding Atlanta metropolitan statistical area (MSA), population and enrollment growth had been strong historically, although the growth has slowed substantially over the past two years. The county's 2008 population of 113,700 is nearly 30% higher than in 2000, and current student enrollment of 14,800 is reportedly about 200 less than the prior school year. Resident wealth levels are well below those of the state and nation, reflecting the district's more rural nature and the attraction of development as more affordable than closer to the metropolitan area. The county's unemployment rate of 10.8% through September 2009 ranks higher than the Atlanta MSA, the state and the nation.

Despite nominal operating deficits in fiscal years 2007 and 2008, the district's financial position remains healthy with solid general fund reserves. Fitch views these reserves as prudent given the continued declines in state funding. Preliminary results for fiscal 2009 show breakeven operations, leaving the unreserved, undesignated general fund balance at approximately $13.5 million, equal to slightly less than 10% of expenditures and transfers. The fiscal 2010 budget is balanced and reflects a $4.6 million reduction in state funding compared to the prior year and an overall $6.6 million decrease in total revenue. Management expects to fill the budgetary gap with federal stimulus money and by implementing furlough days for teachers and administration. State revenue sources generate approximately 60% of district general fund revenues, making the district somewhat vulnerable to fluctuations in state funding.

Historical growth in the tax digest (the basis for the district's property tax levy) had been solid, averaging 6.0% annually from 2004-2008, but the current economic downturn prompted a 1.5% decrease for the current year. Sales tax collections have also weakened amid recessionary pressure. Receipts reportedly declined by a notable 9% in fiscal 2009 relative to actual collections in fiscal 2008. The district's revised projections for the current five-year special purpose sales tax (SPLOST) indicates a $15 million shortfall between originally projected collections and total annual debt service on the outstanding GO sales tax bonds.

Overall debt levels are moderate at $1,970 per capita and 4.6% of market value. Capital needs are minimal following a number of projects completed over the past two years and funded with the 2007 GO bonds. The district does not anticipate issuing long-term debt for the foreseeable future.