The 'AAA' long-term rating on the bonds is based on a guaranty provided by the
The bonds are scheduled for negotiated sale during the week of
In addition, Fitch affirms the 'AA-' underlying rating on the district's
The Rating Outlook is Stable.
The bonds are direct obligations of the district and are secured by an unlimited ad valorem tax pledge of the district. In addition, the bonds are secured by the PSF guaranty.
KEY RATING DRIVERS
STRONG FINANCIAL PROFILE: The district's financial position remains sound as indicated by the maintenance of strong reserve levels. Flexibility is also derived from the comfortable margin on the operating and maintenance (O&M) tax rate.
SIGNIFICANT STATE SUPPORT: Due to its low wealth levels, the district receives considerable state aid for operations.
PROMISING GROWTH PROSPECTS: Ample and affordable land and location within the broader
HIGH DEBT BURDEN: The district's debt levels rose rapidly with the issuance of the 2011 bond program over the last three years. Continued enrollment growth as projected will likely require additional debt issuance. Principal amortization of existing debt is slow.
SHIFT IN FUNDAMENTALS: The rating is sensitive to shifts in fundamental credit characteristics including the district's healthy financial profile. Maintenance of solid reserves while addressing its large and ongoing capital needs is a key credit consideration.
The district is located east of the city of
SOLID RESERVES MAINTAINED
The district's financial profile remains sound, and operating results have shown surpluses in each of the last four years. General fund reserves are strong, boosted by a 2011 change in fiscal year end from
Audited results for fiscal 2013 registered a large
The fiscal 2014 budget was balanced, but actual enrollment again trailed budgeted growth. The budget was built with aggressive expenditure assumptions, and management projects that unexpended budget items will offset the revenue shortfall for a projected surplus of over
HIGH DEBT LEVELS OFFSET BY PROSPECTS FOR CONTINUED GROWTH
Overall debt levels on an accreted basis are high at
During the years 2011 to 2013, the district issued
The district contributes to the Teacher Retirement System of
Growth in the district's primarily residential tax base has moderated in recent years but continued even through the recession. The district's taxable assessed valuations grew by a compound annual average of 4.5% since fiscal 2009, aided by the ongoing residential development that is spurred by abundant affordable land within the district's boundaries.
Enrollment growth has been moderate, slowing from 4% in fiscal 2010 to 1.4% in fiscal 2013. The fiscal 2013 enrollment is just under 44,300 students. Much of the growth has been spurred by the arrival of additional troops and their dependents to
The judge reopened the lawsuit in
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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