The Portola Valley School District has maintained its double bond credit rating from financial services company Standard & Poor's, according to an Oct. 27 press release. The company warns that wildfire risk in the district could impact its finances in the future.

Last year, Standard & Poor's upgraded the district's general obligation bond credit rating two levels, from "AA-" to "AA+," the second-highest possible rating an issuer can achieve.

"We have worked hard to maintain our credit rating for the benefit of local taxpayers," said the district's Chief Business Official Connie Ngo.

The district has benefited from stable revenues which have contributed to strong financial results and the maintenance of "very strong" available reserves, Standard & Poor's said in an Oct. 21 letter to the district.

"(District) management doesn't anticipate major cost pressures in the near term, leading us to expect the district to maintain very strong available reserves," the letter states. "The stable outlook reflects our expectation the district will be able to maintain a very strong available fund balance."

Although Standard & Poor's rating outlook is generally for two years, it sees some increased uncertainty because of the COVID-19 pandemic and the recent recession during the next 12 months. Standard & Poor's doesn't view COVID-19 as having a uniquely strong effect on the district's credit compared to other school districts.

The district has elevated environmental risk given its exposure to earthquakes and wildfires (since the district lies in a forested area), Standard & Poor's wrote.

A higher credit rating results in lower borrowing costs for taxpayers when bonds are sold, district financial adviser Chris Hiatt in the district press release. She noted last year that it's "very rare" for a school district to receive a double rating upgrade.

"The affirmation of the 'AA+' credit rating is a great result for local taxpayers," she said.

The district's rating was updated as part of its upcoming $39.5 million Measure Z general obligation bond issuance to fund projects in the District. This will be the final issuance of bonds from Measure Z. Measure Z, a $49.5 million bond measure, passed in November 2018. The measure is intended to fund repairs, renovations and new buildings on the district's two campuses.

Standard & Poor's generally reviews four factors in assessing a bond issuer's credit rating: finances, management, debt and pension obligations and the local economy.