The Rating Outlook is Stable.
The 'AAA' rating is based on a guarantee provided by the
In addition, Fitch affirms the following underlying rating for the district:
The Rating Outlook is Stable.
The bonds are secured by revenues from an unlimited tax levied against all taxable property within the district. The PSF guaranty applies to all outstanding bonds of the district except the series 2006 ULT school building and refunding bonds.
SOUND FINANCIAL PROFILE: Ample general fund reserves reflect conservative budgeting and cost management, supplemented by voters' approval of a permanent maintenance and operations (M&O) tax rate increase.
STEADY REGIONAL ECONOMIC GROWTH; WEAK INCOME LEVELS: Rapid residential and commercial development continues to expand westward towards the district from
ABOVE-AVERAGE DEBT: Overall debt levels are high and will be pressured by ongoing facility needs based on current enrollment projections. A moderate debt service tax rate provides adequate borrowing capacity over the medium term.
ADEQUATE RESERVES AMIDST GROWTH PRESSURES: Failure to maintain structural balance and adequate reserves as the district faces growing enrollment pressures may lead to negative rating action.
The district is located in the less developed northwestern corner of El Paso County (GO bonds rated 'AA'/Stable Outlook), serving a population of about 27,700 over 67 square miles which include portions of the
HIGH-GROWTH BI-NATIONAL DISTRICT
The district receives residual enrollment growth from
The district has some taxpayer concentration with top 10 taxpayers totaling 15% of TAV in fiscal 2014. The largest taxpayer, the
IHS Global Insights points to the region's younger-than-average population as a key strength, supporting strong service sector growth. However, relatively low skill levels limit high-paying job growth. The city's latest unemployment rate of 6.7% for
SOUND FINANCIAL PROFILE
The district generally outperforms the budget and maintains strong general fund balance levels. State funding comprises 60% of total revenues, a function of strong enrollment growth and the district's property poor classification. After a shift in the district's fiscal year boosted the district's financial cushion in fiscal 2011, the district posted two consecutive years of general fund net surpluses, aided by conservative budgeting, recurring cost savings, and additional revenue associated with the M&O tax rate increase to
In fiscal 2013, the district's
The M&O tax rate is at the statutory cap subsequent to the TRE election, limiting further ad valorem tax revenue growth aside from TAV appreciation. In light of continuing enrollment growth and school funding uncertainty, officials report that the district is identifying further cost savings and prioritizing programs and capital needs. The district has been able to manage growth to date without resorting to portable facilities or materially larger class sizes.
ABOVE AVERAGE DEBT / CONTINUING CAPITAL NEEDS
The district's overall debt is above-average at
Fitch expects the district's overall debt ratios to remain elevated due to enrollment growth pressures and slow debt amortization. The district expects to seek voter approval for a bond authorization in two to three years for a new high school and two elementary schools. Given the district's goal to maintain a level debt service tax rate, steady tax base gains will be necessary to finance the construction of new schools.
AFFORDABLE PENSION BENEFITS
The district contributes to the Teacher Retirement System of
The judge re-opened 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
111 Congress Ste. 2010
Source: Fitch Ratings
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