NEW YORK, New York--March 8,1995--As part of its ongoing surveillance
efforts, Moody's Investors Service has
placed under review nine California
school districts because of potential financial difficulties.
This is in addition to the 11 school districts in href="chap11.orange.html">Orange County, California
already under review. This action is in response to the California Department
of Education's recently issued semiannual memorandum addressing the financial
status of California school districts.
The First Interim Report for the 1994-95 school year lists two districts
with Negative Certification and 57 districts with Qualified
Certification.
Negative Certification is assigned to districts that will not meet their
financial obligations for the remainder of the fiscal year; Qualified
Certification is assigned to a district that may not meet its financial
obligations for the remainder of the fiscal year.
Consistent with our past practices, Moody's will publish a fuller discussion
of the rated districts after release of the state's second and final interim
report for the 1994-95 fiscal year in May. Significant developments for any of
the districts will be reported as reviews are completed.
Moody's maintains debt ratings (unenhanced by insurance) on 20 of the 57
qualified districts; five districts have ratings based on bond insurance.
Neither of the districts with Negative Certification is rated by Moody's.
The 57 Qualified districts include all 27 districts in Orange County, of
which 11 districts are rated by Moody's. The inclusion as Qualified reflects
the districts' limited access to funds invested in the Orange County
Investment Pool (OCIP) as a result of the pool's large investment losses and
its subsequent bankruptcy filing on December 6, 1994.
Chowchilla Union High School District in Madera County is also Qualified
given its involvement in the Orange County Investment Pool. In a memorandum to
the districts in its jurisdiction, the Orange County Department of Education
noted that the state finds that the districts are "extremely well managed and
governed," and that the Qualified Certification is a result of the OCIP
bankruptcy proceedings.
Of the districts in the county, only Orange Unified School District has been
previously listed as Qualified in the first interim report of 1993-94; this
status was noted in January 1994 when Moody's assigned an A rating to the
district's COPs. The rated school districts in Orange County are being
reviewed as part of Moody's surveillance of OCIP participants.
Currently, the bankruptcy court and the creditors' committee are allowing
school districts to withdraw up to 30% of their monies in the pool, although
some districts with urgent needs may withdraw up to 50%. The aggregate
withdrawals by all school districts cannot exceed 30% of the districts'
investments. Such withdrawals are for emergency operating purposes such as
meeting debt service and payroll.
Using these guidelines, Moody's has contacted each of the school districts
in the OCIP for a preliminary assessment of their liquidity and ability to
meet near term debt service requirements.
To date, Moody's has reviewed cash flows and held extensive discussions with
Irvine Unified, Centralia Elementary, Santa Ana Unified and Capistrano Unified
School Districts. These four districts will remain under review pending
further clarification of the status of the OCIP.
For further information on these districts, please see the respective credit
comments published February 10 on Centralia Elementary and Santa Ana Unified,
February 23 on Capistrano Unified, and March 7 on Irvine Unified. Moody's is
continuing our discussions with the other seven districts to obtain additional
documentation. We expect to report on their status over the next few
weeks.
The following is the complete State Department of Education's list of school
districts that received Qualified or Negative Certifications for the first
interim report of fiscal year 1994-95. Although Moody's does not rate all the
districts, we have provided this list as a service to our subscribers and have
included the assigned classifications of the individual districts.
Ratings are for general obligation bonds unless otherwise noted. Negative
Certifications: Negative certification is assigned by the California
Department of Education to a school district or county office of education
that will not meet its financial obligations for the remainder of the fiscal
year.
District or
County Office
of Education County Rating
--------------------------- --------------- ------------
West Fresno Elementary Fresno NR
Mountain Empire Unified San Diego NR
Qualified Certifications: Qualified certification is assigned by the
California Department of Education to a school district or county office
of education that may not meet its financial obligations for the
remainder of the fiscal year.
District or
County Office
of Education County Rating
--------------------------- --------------- ------------
Alameda Unified(a) Alameda A
Albany Unified(a) Alameda (1)
Vallecito Union Elementary Calaveras Baa
West Contra Costa Unified Contra Costa Ba(2)
Brawley Union High School Imperial NR
Calexico Unified Imperial Con. (Baa)(2)
Acton-Agua Dulce Unified(a) Los Angeles NR
Compton Unified(a) Los Angeles (1)
Duarte Unified Los Angeles NR
Inglewood Unified Los Angeles NR
Garvey Elementary Los Angeles NR
Montebello Unified Los Angeles (1)
Palmdale Elementary Los Angeles Con. (Baa)(2)
William S. Hart Union
High School(a) Los Angeles A1
Madera County Office
of Education Madera NR
Chowchilla Union High School Madera Con. (Baa)(3)(2)
Round Valley Unified Mendocino NR
Monterey Peninsula Monterey NR
Orange County Office
of Education Orange NR
Anaheim Elementary Orange NR
Anaheim Union High School Orange NR
Brea-Olinda Unified Orange Baa1(3)(2)
Buena Park Elementary Orange NR
Capistrano Unified Orange A(4)
Centralia Elementary Orange A(4)
Cypress Elementary Orange A(3)
Fountain Valley Elementary Orange A(3)
Fullerton Elementary Orange NR
Fullerton Joint Union
High School Orange NR
Garden Grove Unified Orange NR
Huntington Beach Elementary Orange NR
Huntington Beach Union
High School Orange A(3)
Laguna Beach Unified Orange NR
La Habra City Elementary Orange NR
Magnolia Elementary Orange NR
Newport-Mesa Unified Orange NR
Ocean View Elementary Orange NR
Orange Unified(a) Orange A(3)
Placentia Unified Orange A1(3)
Santa Ana Unified Orange A1(4)
Savanna Elementary Orange NR
Westminister Elementary Orange NR
Saddleback Valley Unified Orange (1)
Tustin Unified Orange NR
Irvine Unified Orange A(3)
Los Alamitos Unified Orange Baa1(3)(5)
Colfax Elementary(a) Placer NR
Hesperia Unified San Bernardino NR
Needles Unified San Bernardino NR
Manteca Unified San Joaquin NR
Jefferson Union High School San Mateo NR
Eastside Union High School(a) Santa Clara A1
Redding Elementary Shasta Baa1
Butte Valley Unified(a) Siskyou County NR
Monte Rio Elementary(a) Sonoma NR
Ocean View Elementary Ventura A
Rio Elementary Ventura (1)
NOTE: (a) Noted as negative or qualified certification during 1993-94.
(1)Debt insured.
(2)Certificates of Participation.
(3)Under review as an Orange County Investment Pool Participant.
(4)Initial review performed. Ratings remain under review pending
clarification of the status of the OCIP.
(5)Mello-Roos bonds.
Source: California Department of Education.
CONTACT: Moody's Investor Service, New York
Mary Francoeur
Assistant Vice President
212/553-7240
NEWPORT BEACH, Calif., March 8, 1995 -- href="chap11.comprehensive.html">Comprehensive Care Corp.'s
(NYSE:CMP)" target=_new>http://www.secapl.com/cgi-bin/edgarlink?CMP">(NYSE:CMP)
chairman, president and chief executive officer, Chriss W. Street,
announced that on March 7, 1995 the U.S. Bankruptcy Court for the Northern
District of Texas, Fort Worth Division, dismissed the involuntary bankruptcy
petition previously filed against the company.
Comprehensive Care Corp. provides cost effective health care management and
behavioral medicine services on an at-risk and contractual basis throughout
the United States.
/CONTACT: Chriss W. Street, chairman & president of Comprehensive Care,
714-644-9425; or Rudy R. Miller of The Miller Group, 602-225-0505/