San Marcos Mercury | Local News from San Marcos and Hays County, Texas

July 15th, 2008
Upgraded bond rating saves Hays CISD on debt

STAFF REPORT

KYLE – Hays CISD officials say they received a good deal on school bonds this month because Fitch Ratings and Standard and Poor’s rating service both upgraded the school district’s bond rating from A to A-plus.

The rating applied to the 2008 bonds and all outstanding bonds. The school district issued $86.7 million of bonds last week after voters approved the bond issue in a May 10 election. Voters approved the measure by better than a two-to-one margin – 1,114 to 470. The school district said the bonds weren’t expected to impact the property tax rate.

Hays CISD sold the series 2008 bonds last week at an interest rate of 4.73 percent, which is 52 basis points below the number presented to voters before the election.

“This upgrade is the result of the district’s commitment to maintaining a strong financial position given the financial and capital pressures related to rapid growth,” said Carter Scherff, Hays CISD Deputy Superintendent. ” … The district will save more than $19 million over the life of the bonds due to the lower interest rate.”

According to Fitch Ratings, “the upgrade reflects the district’s steadily growing fund balance reserves despite rapid enrollment growth pressures, and continued expansion of its tax base with prospects for sustained growth resulting from accelerating commercial development projects and availability of affordable land.”

According to Standard & Poor’s (S&P), the upgrade is based on “the district’s continued tax base growth and consistently strong financial position.”

The debt ratings raise reflects the district’s location with direct transportation access to the greater Austin-San Marcos metropolitan statistical area labor markets, strong financial position, and rapidly growing and diverse tax base, according to S&P.

“Despite pressures from student enrollment growth, Hays CISD continues to improve its financial position,” the S&P reported said.

Hays CISD is using the money to build a middle school, two elementary schools and make other district-wide improvements. School district trustees approved construction documents for the middle school in March so construction could begin in April.

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