DALLAS - The Dallas County Community College District is planning to price $220 million of limited general obligation bonds representing the second issue from a 2004 authorization of $450 million.

The bonds are expected to price through negotiation on Aug. 5, with Southwest Securities as senior manager. Co-managers include Banc of America Securities LLC, Morgan Keegan & Co., RBC Capital Markets, Ramirez & Co., JPMorgan, M.R. Beal & Co., and Siebert Brandford Shank & Co.

First Southwest Co. and Estrada Hinojosa & Co. serve as financial advisers to the district.

With natural triple-A ratings from all three ratings agencies, the bonds are expected to find strong demand from investors seeking high-quality paper, according to industry executives.

The bonds will finance five community education campuses for underserved or fast-growing populations in Dallas County.

The district has seven colleges in Dallas County and ranks as the largest community college district in the state. About 10% of the county's adult population enrolls at the district each year. Enrollment growth has been steady, but trending upward since Fall 2005. The DCCCD projects average annual enrollment growth at rates of 2%-3%.

Although the Dallas area is actually adding jobs and suffering fairly minor pangs from the nation's economic downturn, DCCCD colleges are seen as a major buffer against extended slumps because of their job-training and professional programs.

Analysts consider the district's financial condition strong, with good fiscal management practices.

Total unrestricted net assets were $156.3 million at fiscal year-end 2007 with cash and cash equivalents of $138.9 million, according to Standard & Poor's. During fiscal 2007, the district invested a larger portion of its cash in short-term investments compared to long-term investments.

"The result was an immediate strengthening of the district's liquidity position since these are considered current assets," Standard & Poor's analysts noted. "As the interest rate environment changes, management will likely reverse that strategy to maximize returns with longer-term investments."

Property tax revenues account for 37% of the district's budgeted fiscal 2008 operating revenues, with state appropriations providing about 28%, and tuition revenue generating about 20%.

Tuition for students living in Dallas County has been raised regularly by modest rates, and it remains competitive with surrounding community college districts. The property tax rate is 8.04 cents per $100 of assessed valuation in fiscal 2008, about half the operating and maintenance tax rate limit of 16.00 cents.

"The rate's debt service portion is extremely low at less than a half-cent per $100 of assessed valuation," according to Standard & Poor's.

Taxes collected for operations came to $113 million, with another $10.7 million collected for debt service. The district used a portion of those taxes to pay debt service on the series 2004 GO bonds. The remainder went to pay debt service on series 2004 maintenance tax notes, which mature in 2013.

"Even with this issuance, DCCCD maintains a moderate debt position," according to Fitch Ratings analysts. "Fitch believes the large capital program underway that includes five new campuses may, however, apply some degree of pressure to the district's operating margins and reserves over the near term."

Sharing boundaries with Dallas County, which is also rated triple-A, the district covers 860 square miles and serves a population of almost 2.4 million.

Established in 1965, the district's bond proposal won approval of more than 70% of Dallas County voters in May 2004.

The DCCCD is one of 23 growing community college systems in the state. The Alamo Community College District in San Antonio last July issued the last $64 million from a 2005 authorization of $450 million.

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