The 'AAA' long-term rating is based on a guaranty provided by the
The bonds are expected to price via negotiation the week of
In addition, Fitch assigns an 'AA+' underlying rating to the series 2014 bonds and affirms the 'AA+' rating on the district's
The Rating Outlook is Stable.
The bonds are payable from and secured by an unlimited ad valorem tax levied against all taxable property in the district. The bonds are secured further by the PSF guaranty.
KEY RATING DRIVERS
FINANCIAL FLEXIBILITY: The district's financial profile is characterized by consistently strong operating performance and healthy reserves. Sound fiscal management and establishment of a budget stabilization fund position the district favorably for ongoing growth and the uncertainties of future state funding.
HEALTHY TAX BASE: The district's taxable assessed valuation (TAV) continues to realize solid growth following a recessionary lull. Benefitting from its location in the larger
ONGOING ENROLLMENT GROWTH: The district is the fourth largest in the state, typically adding two to three schools a year, a rapid growth pattern which Fitch anticipates to continue based on the district's projected enrollment growth.
HIGH DEBT LEVELS: Overall debt is high in relation to the district's population and market value, not atypical for rapidly growing suburban districts in the state. Fitch expects debt levels to remain high as the district is only about two-thirds built-out. Ample interest and sinking fund (I&S) tax rate capacity remains to support future issuance.
CHANGE IN FUNDAMENTALS: The rating is sensitive to shifts in fundamental credit characteristics including the district's strong financial management practices. The Stable Outlook reflects Fitch's expectation that such shifts are unlikely.
The district is located in the larger
STRONG FINANCIAL FLEXIBILITY
The district has maintained strong financial performance despite the pressures associated with sustained enrollment growth and state funding cuts. The district completed fiscal 2013 with a sound
The district maintains a high degree of financial flexibility both in its unrestricted reserves of
Officials project the district's fiscal 2014 unrestricted reserves to remain relatively constant at about 28% of spending. The reserves include
The district's fiscal 2014 TAV of
Job growth continues to support a favorable county unemployment rate of 5.5% in
HIGH DEBT; ONGOING CAPITAL NEEDS
Overall debt ratios are high at about
The district's debt service burden consumes 10.7% of fiscal 2013 governmental expenditures. The district historically maintains a moderate amount of its debt portfolio in variable rate demand obligations (VRDOs), currently 22%, within the district's policy ceiling of 30%. Terms of the VRDOs include a three-to-five year initial fixed rate term, a soft put back to bondholders in lieu of liquidity support and optionality to periodically reset the rate to a long-term fixed basis. The risk to the district is in the case of a failed remarketing whereby the district would pay an elevated interest rate, capped at a fixed rate currently ranging from 6% to 8% as applicable to the district's outstanding VRDOs.
District voters authorized
The district's I&S rate (
LIMITED PENSION/OPEB OBLIGATIONS
The district's pension liabilities are limited to its participation in the state pension plan administered by the Teachers Retirement System of
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
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