...Standard & Poor's Ratings Services affirmed its '##' long-term rating on the California Municipal Finance Authority's series 2012 charter school revenue bonds, issued for Santa Rosa Academy Inc., (SRA). The outlook is negative. While we recognize the improvement in operations and operating liquidity during fiscal years 2014 and 2013, the affirmation and negative outlook reflect the likelihood additional debt within the next year to fund the construction of the gymnasium and baseball field could negatively impact balance sheet metrics and operations. Final cost estimates or exact funding sources are not known at this time; however, per management, current estimates are in excess of the $7.5 million discussed during our last review. The school's current maximum annual debt service (MADS) burden is high at 20% of fiscal 2014 expenses, which could weaken with the issuance of additional debt. Mitigating these weaknesses, in our opinion, is the school's growing enrollment, history of positive...
