The Rating Outlook is Stable
The bonds are secured by ad valorem taxes levied against all taxable property within the district, without limitation as to rate or amount. In addition, the bonds are secured by the
KEY RATING DRIVERS
HIGHLY INDUSTRIAL ECONOMY: The district is home to the largest petroleum refinery and among the largest petrochemical plants in the U.S. With port access and a rich multimodal transportation network, the area also serves as a regional distribution hub.
CONCENTRATED BUT LONGSTANDING TAX BASE: Fitch expects the district's tax base concentration to remain substantially high due to expansions underway by top taxpayers, but notes the essentiality of the petrochemical processing and refinery business in the U.S. Additionally, the presence of some diversity between upstream and downstream petroleum usage within the district's tax base helps mitigate the impact of oil price volatility.
STRONG FINANCES; ABUNDANT RESERVES: The district historically outperforms the budget and maintains sizable general fund reserves, which Fitch expects will remain ample. The district's high reserves are the key mitigant to above-average cyclicality of the economic base.
HIGH DEBT; MANAGEABLE PENSIONS: The burden of high debt on the budget is made manageable by the state's support of district pension payments. Further leverage and/or a material shift in the pension burden, although not expected, would not be consistent with the current rating.
FINANCIAL FLEXIBILITY: The rating is sensitive to shifts in the district's financial flexibility as ample reserves mitigate exposure to economic cyclicality and state funding uncertainty.
Goose Creek CISD serves a population of about 101,000, primarily in the southeastern portion of
CONCENTRATED, INDUSTRIAL ECONOMY
The district's tax base is represented largely by petrochemical, oil refining, distribution, electric utility and manufacturing entities, led by ExxonMobil, which comprised a high 29% of the fiscal 2013 tax base. ExxonMobil's
Fiscal year 2014 market value of
SOLID FINANCIAL MANAGEMENT
Fitch considers the maintenance of conservative budgeting practices and sizeable fund balances as key credit mitigants to the highly concentrated tax base. Proactive cost-cutting measures in anticipation of potential state budget cuts and a
The fiscal 2014 budget includes a rise in compensation costs supported by a more stable revenue environment both locally and statewide. The district expects state increases to public education funding to provide a direct benefit to its base revenue in the amount of
Fund balance is expected to remain high at 50% of fiscal 2014 spending and well above the district's recently formalized policy. The district strives to maintain no less than four months (33%) of general fund spending however, Fitch believes reserves well above the policy level more adequately offset the risk associated with economic cyclicality for the current rating level.
The district changed its fiscal year end to
DEBT METRICS ELEVATED; MANAGEABLE LONG-TERM LIABILITIES
The district's high debt levels are a key credit concern. Overall debt totals
The district recently added variable rate debt to its profile. Approximately
Carrying costs for debt service, pensions and other-postemployment benefits (OPEB) are low at 10% of fiscal year 2013 governmental spending. The state's funding of school districts' payments to the
The judge agreed to reopen testimony after the
Additional information is available at 'www.fitchratings.com'.
In addition to the sources of information identified in Fitch's Tax-Supported Rating Criteria, this action was additionally informed by information from Creditscope,
--'Tax-Supported Rating Criteria' (
--'U.S. Local Government Tax-Supported Rating Criteria' (
Tax-Supported Rating Criteria
U.S. Local Government Tax-Supported Rating Criteria
Source: Fitch Ratings
Most Popular Stories
- Chinese May Have Spotted Malaysia Airlines Debris
- Why Buffett Bets Big on Green Energy
- 3 Shot Dead in Venezuela Unrest
- Banks Buying Little From Minority Firms: Study
- Better Pay Means Bigger Profits: Strategist
- Several Texas Cities Top Job Search List
- First-time Jobless Claims Drop Unexpectedly
- Senate Committee OKs Bill to Sanction Russia
- G7 Presses Russia to Pull Troops Out of Crimea
- Wall Street Rally Heads Off 3rd Day of Decline