Moody’s Investors Service last week lowered its rating on the Spring Independent School District’s debt to Aa3 from Aa2.
The action affects $695.6 million of outstanding general obligation debt. The district has no authorized but unissued debt.
The district is located in Harris County, about 20 miles north of downtown Houston.
Moody’s said the action was a result of a sizeable contraction of the district’s tax base over the past two years, limited financial flexibility due to a continued deteriorating financial position through fiscal year 2010, and eroding reserve levels.
No other agency rates Spring ISD’s debt.
Residential properties account for 48.4% of total taxable property in the 58-square-mile district, with commercial and industrial properties totaling 46.3% of total taxable values.
The district’s tax base was down 1.5% in fiscal 2010 from 2009, after averaging 8.7% annual growth between fiscal 2001 and 2009. However, total valuations are expected to decline 9.3% in fiscal 2011 to a total of $7.3 billion.
Spring ISD’s reserve fell to $28.3 million in fiscal 2009 from $45.5 million in 2006. Trustees reduced expenditures in fiscal 2011 by $10 million by eliminating salary increases and delaying the opening of a new school.
The district’s debt is enhanced to triple-A by the Texas Permanent School Fund.
