--ULT school building bonds, series 2001, 2009, and 2010;
--ULT school building and refunding bonds, series 2003, 2005, 2006, 2007, and 2008;
--ULT refunding bonds, series 2010, 2010A, and 2011.
The Rating Outlook is Stable.
The bonds are secured by an unlimited ad valorem tax pledge levied against all taxable property within the district.
KEY RATING DRIVERS
VERY HIGH DEBT LEVELS: Debt levels are very high and amortization of principal is slow. The current debt structure and debt service tax rate limit flexibility for issuance of new money debt for additional facilities.
CAPITAL NEEDS CONTINUE: The district's enrollment trend moderated somewhat but remains very strong resulting in the need for additional facilities over the near to medium term.
STRONG FINANCIAL PERFORMANCE: Consistently strong financial performance is a stabilizing credit factor. The district has posted positive financial results in each of the last five fiscal years despite recent state funding cutbacks and pressures associated with enrollment growth. The district's unrestricted general fund balance and liquidity remain solid.
TAX BASE REMAINS SOLID: The district's solid tax base resumed growth after a single year of a modest decline. The prospects for continued growth are favorable given the availability of land and recent completion and ongoing construction of road infrastructure that opens more land for development. Moreover, the tax base, while still predominantly residential, is diversifying, with increased commercial construction over the past few years.
STABLE ECONOMY: The district benefits from its location within the broad economic and employment base within the
MAINTENANCE OF STRONG FINANCIAL PROFILE: The rating is sensitive to shifts in fundamental credit characteristics including the district's strong financial profile and high reserves, factors that offset concerns over its weak debt profile.
PRESSURE TO FUND CAPITAL NEEDS: Pressure to maintain a tax rate below the statutory
The district is located northwest of
HIGH DEBT BURDEN AND CONTINUED CAPITAL PRESSURES
Fitch considers the district's debt levels very high. Overall debt levels approximate 9% of market value and over
Earlier this year, the district issued approximately
CONSISTENT POSITIVE OPERATING RESULTS
The district's financial position is a positive credit factor. Revenue variances are typically favorable due to rapid enrollment growth and conservative estimates. The district currently levies at
The district has historically recorded operating surpluses that have resulted in strong reserve levels, which enhance its financial flexibility. Despite deep state funding cuts, for fiscal years 2012 and 2013, audited results exceeded original projections primarily due to spending cuts and very conservative enrollment projections. The district eliminated budget gaps of
The district adopted the fiscal year 2014 budget with a projected
For fiscal 2014 management reports that positive variances in both revenues and expenditures are now projected to bring ending results to an estimated
STABLE AND DIVERSE LOCAL ECONOMY
The district is largely residential in nature but benefits from its location in the broad economic and employment base of the
While the district had historically experienced double-digit%age tax base growth due to the availability of affordable land TAV growth slowed in fiscal year 2010 and decreased a modest 1% in fiscal 2011 reflecting a less robust housing market. TAV quickly rebounded in fiscal year 2012 with 2% growth. Fiscal years 2013 and 2014 reflect a modest acceleration with growth of 4.1% and 6.7%, respectively.
As a result of area residential development enrollment over most of the last decade grew very rapidly, increasing at an average annual pace of about 10% between fiscal years 2003 and 2008. With the economic slowdown, annual enrollment growth trends have slowed but remain significant with about 1,000 new students annually over the past three years. District enrollment currently approximates 35,150 students. At present, demographic studies project anywhere from 10,000 to 15,000 new students over the next 10 years, maintaining pressure on the district to construct new campuses.
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 and
--'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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