The 'AAA' rating reflects the guarantee provided by the
Fitch also assigns an 'AA' underlying rating to the series 2014 refunding bonds.
The bonds are expected to price via negotiated sale as early as the week of
In addition, Fitch affirms its underlying rating on the district's
The underlying Rating Outlook is Positive.
The bonds are secured by an unlimited ad valorem tax levied against all taxable property in the district, and are secured further by the PSF guarantee.
KEY RATING DRIVERS
POSITIVE OPERATING TRENDS: The Positive Outlook reflects the district's trend of generating surplus results despite the challenging operating environment posed by state funding cuts, growing general fund reserves to very high levels. Moreover, these results were achieved while prudently maintaining a modest margin of taxing flexibility for operations.
TAX BASE EXPANSION: Residential and commercial development has resulted in moderate tax base growth in the last two fiscal years. Growth prospects remain positive given the district's location, which straddles IH 35 between two major cities,
MODERATELY HIGH DEBT BURDEN: The district's above-average debt burden reflects the accelerated enrollment growth prior to the downturn and facility construction of the last five fiscal years, but it is mitigated by prospects for continued growth with manageable debt plans.
ROBUST ECONOMY: The district's economic base benefits from its location in the
MAINTENANCE OF STRONG CREDIT FUNDAMENTALS: A continued trend of balanced operations and maintenance of strong reserves, along with a stable to declining trend in the long-term liability burden, could result in positive rating action.
ECONOMY SUPPORTED BY PROXIMITY TO
Located 30 miles north of
The city's unemployment rate of 4.1% in
STRONG FINANCIAL FLEXIBILITY
The district continued to maintain a very sound financial profile in the past few years despite operating pressures associated with state funding cuts. A trend of annual operating surpluses has contributed to growing reserve levels, including an unrestricted fund balance that reached
The fiscal 2015 preliminary budget currently projects a
ENROLLMENT AND TAX BASE GROWTH CONTINUES
Enrollment continues to record steady gains, averaging about 2.3% annually from 2008-2014 with current enrollment at 8,280 students. Taxable assessed value (TAV) increased by an average of more than 5.6% annually during the same period. The area was fairly resilient to the downturn and only experienced a modest 1% dip in TAV in fiscal 2011. The tax base quickly resumed growth in fiscal 2012 due to accelerated commercial and residential development in the area. The district's TAV for fiscal 2014 grew 6.7% from the prior year, reaching
Management expects additional moderate growth in student counts and TAV in the near term as the ongoing northern expansion of
ABOVE-AVERAGE DEBT BURDEN
District debt ratios are above average, but have come down from previous levels as a result of ongoing population and tax base expansion. Overall debt ratios stand at
The district has no remaining authorization to issue new money bonds. Given the current enrollment growth trends, the next facility need will be at the elementary school level. The district reports that the earliest anticipated call for a bond election would be in
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
Carrying costs, including debt service, pension and OPEB contributions, were a moderate 17.4% of fiscal 2013 governmental spending, benefitting from the state's strong pension funding system currently in place. However, districts are susceptible to future funding changes by the state as evidenced by a relatively modest 1.5% of salary contribution requirement effective fiscal year 2015.
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
- Neighbor Warns Chris Brown to Stay Off His Property
- Venezuelan Officials Banned From Traveling in U.S.
- Homeowners More Satisfied With Mortgage Servicers
- Ford Tremor: Easy to Park, Hard to Pay For
- WWE Showing Off Its Muscles
- As Jobs Market Strengthens, Many Don't Feel It
- Adrienne Bailon Disses Ex-Lover Rob Kardashian
- Target Taps Pepsi Exec as New CEO
- Hispanic Arts Leaders Unite Across the Border
- What Hamas and Israel Hope to Gain in Gaza