LONGVIEW (KYTX) - Fitch Ratings, an international financial ratings system, affirmed today its "AA" rating for Longview Independent School District's $258.4 million unlimited tax bonds, giving the district a stable outlook.
An "AA" is the second-highest mark in the ratings system.
According to a statement issued today, Fitch said the district's consistently positive operating margins have yield significant general fund reserve levels and liquidity, providing the district with a high degree of financial flexibility. Aggregate debt levels and the annual debt burden on the district's budget are high while amortization is slow, but despite a debt service tax rate that is near the state's tax rate cap for newly issued debt, the district has minimal future capital needs, Fitch said.
LISD's taxable assessed value has fluctuated in recent years but is poised to climb modestly in 2013. Fitch also said the district has positive financial operations and a strong balance sheet, noting that Fiscal Year 2011 results "decidedly outperformed the balanced budget, with conservative revenue forecasts and underspending of the budget, producing a significant $7.7 million operating surplus." That surplus equaled 13.5 percent of the district's expenses that year, leaving LISD with about $38.9 million in unrestricted general fund reserves.
LISD recently completed a nearly $270 million construction overhaul, after voters approved a bond election in May 2008.
"The area economy has traditionally served as a center for oil and natural gas operations but has become increasingly diversified with the growth of education, health care, manufacturing, transportation/distribution, government and retail trade as major employment sectors," Fitch Ratings stated in a media release today. "The area employment picture is positive, with a fairly low unemployment rate and expanding employment count in the city. Both indicators improved during the 12-month period ending May 2012; the unemployment rate dropped to 5.9% from 6.7% and employment grew a solid 2.5%. Wealth levels of district residents are below average, with both per capita income and median household income at 81% of the nationwide average; however, the region also has a lower cost of living."
Fitch expects about 1.7 percent growth in the Longview area's estimated $4 billion total assessed values.
