The Rating Outlook is Stable.
The bonds are secured by an unlimited ad valorem tax pledge of the district. In addition, the bonds are secured by the
KEY RATING DRIVERS
TAX BASE CONCENTRATION: Natural gas and power generation properties dominate the local economy, with the top 10 taxpayers constituting 35% of taxable assessed value (TAV). Significant capital investment of these properties and the output demand from the energy sector combined with the district's high reserve levels somewhat mitigate these concerns.
SOLID FINANCIAL PERFORMANCE: Strong financial performance has yielded operating surpluses in four of the last five fiscal years. Unrestricted general fund balance and liquidity remain healthy despite recent state funding cutbacks in recent years.
MINIMAL GROWTH PRESSURES: The district maintains a modest student enrollment with minimal growth pressures and ample capacity in existing facilities.
MODEST LONG-TERM LIABILITIES: The district's debt profile is characterized by manageable direct debt, rapid principal amortization, and limited debt plans. Affordable carrying costs for debt service and retiree benefit contributions are a credit positive.
The rating is sensitive to shifts in fundamental credit characteristics including the district's financial management practices and high fund balance level. The Stable Outlook reflects Fitch's expectation that such shifts are unlikely.
The district encompasses about 146 square miles in
CONCENTRATED ECONOMIC BASE
Natural gas production from the
Overall, the local tax base grew at a steady, modest pace throughout the economic downturn. TAV grew by 2.2% in fiscal 2013, and an additional 3.2% in fiscal 2014.
Unemployment rates historically have been lower than the state and national averages; the
STRONG FINANCIAL PROFILE
The district continues to maintain a sound financial profile despite operating pressures associated with state funding cuts of
The district's unrestricted general fund balance increased to
The fiscal 2014 budget is approximately level with the prior year with total spending of
AFFORDABLE LONG-TERM LIABILITIES
Overall debt per capita is moderate at
The district's pension liabilities are limited to its participation in the state pension plan administered by the Teachers Retirement System of
The state's payment of district pension costs is an important credit strength as it keeps overall carrying costs manageable in the face of a high and growing debt burden. Carrying costs, including debt service, pension and other post-employment benefit (OPEB) contributions, were a low 10.9% of fiscal 2013 governmental fund spending. Starting in fiscal 2015, pension contributions for all districts in the state will rise to 1.5% on the statutory minimum portion of payroll, from zero, increasing carrying costs further, although pass-through state aid is projected to largely offset the year's increase. Further increases in district funding requirements beyond fiscal 2015 could create additional budget pressure, which Fitch will monitor.
The judge agreed to reopen testimony 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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