DALLAS – Two Dallas-area school districts – one serving some of the wealthiest students in the nation, the other some of the poorest – are going to the bond market to finance remodeling or replacement of aging and historic landmarks.
Dallas Independent School District will price $345 million of school construction bonds in a competitive sale Feb. 9, said chief financial officer David Terry. In March, the district will offer another $300 million of multi-modal debt in a negotiated deal, he said. Both issues come from a record $1.6 billion authorization approved by voters Nov. 3.
Highland Park ISD, a wealthy enclave surrounded by DISD, is aiming for a mid-February competitive pricing of $194 million of bonds, the first tranche from a $361.4 million authorized by voters on the same day Dallas ISD won its approval.
Both districts will carry triple-A ratings on their bonds with a guarantee from the Texas Permanent School Fund.
Underlying ratings for both districts are also strong, thanks to the healthy Dallas-area economy and the wealthy tax base of Highland Park. Highland Park has underlying triple-A ratings, while Dallas ISD's underlying Moody's Investors Service rating is one notch lower at Aa1. Standard & Poor's raised its underlying rating on DISD to A from A-minus in June.
Based on criteria from the Texas Education Agency, Dallas and Highland Park are both considered "property wealthy" districts, meaning they have to share excess property tax revenue with "property poor" districts throughout the state.
For DISD, the "property wealthy" designation carries a whiff of irony, since about 90% of Dallas ISD's 160,361 students are considered at or below the poverty level. Per capita incomes in the district are also below the national average.
By contrast, Highland Park's 7,090 students live in a district with the highest per capita income in the state. Median family income is 3.5 times the national average.
Serving students in Highland Park and neighboring University Park, Highland Park ISD has seven campuses for four elementary schools, one intermediate school, one middle school and one high school.
All of Highland Park's schools are considered local landmarks, requiring reassurance to voters that the buildings to be replaced or modified would maintain the traditional character.
Plans to demolish and replace three elementary schools brought opposition to the bond proposal, the largest in the district's 101-year history.
Preservation Dallas, a local advocacy group, said the buildings should be preserved because of their historic and architectural value. The schools, listed among the groups
Hyer Elementary School, which opened in 1949, was designed by Mark Lemmon, a notable Dallas architect who also designed the Cotton Bowl, several buildings on the neighboring Southern Methodist University campus and other landmarks.
"Our highest compliment will be if people say that these schools look like Highland Park and that they fit with the community," said Jonathan Aldis, project manager for the architectural firm Stantec. "We have spent a great deal of time and effort trying to get this right."
For Dallas ISD, the bond money is designed not only to replace or repair aging infrastructure but also to match population with school attendance zones. While some of its schools are over capacity and require portable buildings, others are underused.
Pinkston High School, originally a segregated black high school in West Dallas, is being rebuilt at a proposed cost of $130 million, even though it is half full. Neighbors around the school questioned the wisdom of rebuilding the school, some fearing that their houses would be taken through eminent domain.
Across town, the landmark Woodrow Wilson High School will expand through new classrooms.
Current plans call for $500 million, about 31% of the bond authorization, to be used for school repairs, with $464.8 million dedicated to new and replacement schools. About $233 million will go to upgrades for labs, gyms, cafeterias and other facilities. Another $195.3 million, or 12%, is set aside for additional classrooms, while 7% is reserved for land acquisition. The remainder, 6%, is for new educational programs.
DISD is experiencing modest growth; most of the Dallas metro area's population growth occurs in the far-flung suburbs.
The district's population increased 3.5% to 1.02 million between 2000 and 2010, according to census data. Enrollment has historically hovered around 157,000, but has experienced a 0.5% five year average annual growth rate to reach 160,361 for fiscal 2015, according to Moody's.
Officials attribute the recent enrollment growth to improved academic performance and an increase in multi-family housing developments. Projections indicate steady enrollment over the next few years.
While Highland Park ISD's enrollment is 94% white, DISD's is less than 5%, with Hispanics accounting for more than 70% and African-Americans representing about 23%.
White flight contributed to massive growth in suburban school districts during the desegregation of Dallas schools in the 1960's and 1970's, but Highland Park's boundaries were drawn long before.
Residents of Highland Park even sought annexation by the city of Dallas in 1913 but were refused. After the village of Highland Park incorporated in 1915, the residents around SMU also sought incorporation by Dallas or Highland Park but were also refused, leading to creation of the separate University Park.
In the same era, in downtown Dallas, DISD established what would become a landmark, the Booker T. Washington High School, originally Dallas Colored High School. Built in 1922, the high school is now a highly regarded magnet arts school whose alumni include singers Norah Jones and Edie Brickell.
As the second-largest school district in Texas behind Houston ISD, Dallas ranks first in outstanding debt with $2.553 billion or $17,293 per student, according to the Texas Bond Review Board. Houston ISD ranked with $2.551 billion or $13,168 per student.
In the upcoming deal DISD is using RBC managing directors Clarence Grier and Bob Henderson, along with Estrada Hinojosa & Co.'s senior managing director Bob Estrada and managing director U.S. Williams Jr.
