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 PERFORMANCE: The district consistently records operating surpluses which has resulted in the steady growth of total general fund reserves. Management has demonstrated the ability to achieve favorable financial results during periods of changing enrollment trends and state funding reductions by aligning expenditures with revenue levels.
TAX-BASE GROWTH: New residential construction and commercial expansion have offset valuation losses, contributing to overall tax base growth over the past several years, albeit at a slower post-recession pace. The district resides on the eastern boundary of
MANAGEABLE DEBT BURDEN: The district's overall debt is above average in relation to market value, although overall fixed costs (including debt service and pension contributions, and OPEB) are low in relation to governmental spending. State assistance currently funds approximately 70% of debt service expenditures. Management does not anticipate issuing new debt in the near term given the current enrollment trends and adequacy of existing infrastructure.
BELOW-AVERAGE SOCIOECONOMIC PROFILE: The region's income levels are below average, but have grown faster than state and national levels over the past five years. Unemployment has improved from a year ago, but continues to exceed state and national averages.
SHIFT IN FUNDAMENTALS: The rating is sensitive to shifts in fundamental credit characteristics including the district's healthy financial profile. The Stable Outlook reflects Fitch's expectation that such shift is unlikely.
The district is located approximately 18 miles southeast of the city of
STRONG FINANCIAL PERFORMANCE
Management budgets conservatively and maintains a healthy level of reserves, which Fitch considers prudent in light of ongoing state budget uncertainties. State funding contributed more than 75% of the district's operating revenues over the past five years, followed by ad valorem tax revenues and federal monies.
Federal funding sources and enrollment growth allowed the district to make up for state revenue shortfalls. Modest cost reductions supported limited staff reduction through attrition in the fiscal 2012/2013 biennium. The district's audited results were better than previously projected, closing each of those years with a
The district's amended operating budget for fiscal 2014 includes a prudent use of
MANAGEABLE DEBT BURDEN
Metrics for overall debt outstanding are mixed, with moderate debt per capita (
The district contributes to the Teacher Retirement System of
GROWING ECONOMY BENEFITS FROM PROXIMITY TO
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 4.8% since fiscal 2009. Ease of access to the city of
IHS Global Insights points to the
Enrollment growth averaged 4.4% annually from fiscal 2005 to 2011 but has since been relatively flat at its fiscal 2014 enrollment of 11,642. The district's projections for both capital planning and operations assume a modest growth rate of less than 1%, but management monitors closely to make timely budget adjustments if needed.
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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