DALLAS - The Tyler Junior College District will upgrade and repair critical infrastructure and existing facilities at its campuses in the East Texas city of Tyler with proceeds from today's competitive sale of $24.5 million of 10-year maintenance tax notes.
The notes will be the district's sole tax-supported debt.
The Tyler district has some $63 million in revenue debt supported by tuition and fees. Property tax revenues and state appropriations are specifically excluded from the pledged revenue support for the revenue debt.
The maintenance tax notes are rated AA-plus by Standard & Poor's, which provides an A-plus rating for Tyler Junior's revenue bonds.
The tax-exempt notes are supported by the revenue generated by the college district's property tax for operations of 13.7 cents per $100 of assessed valuation. The tax rate will increase to 16.8 cents per $100 beginning in fiscal 2011 as a result of this issue.
Junior college districts in Texas are allowed to charge an operations and maintenance tax of up to 50 cents per $100 of assessed valuation. Tyler trustees have imposed their own limit of 28 cents per $100. The district does not levy the property tax authorized under Texas law for debt service because it has no outstanding general obligation debt.
The maintenance tax notes are the first issued by the district, said Steven Adams of Specialized Public Finance Inc., Tyler Junior's financial adviser.
"The district has issued revenue debt in recent years for a new residential facility and other buildings, but this is its first issue of maintenance tax notes," Adams said. "The proceeds can be used only for maintenance and repairs on existing structures, not for new buildings."
The district has no plans at this point to issue additional notes or revenue bonds within the next two years, he said.
The district's bond counsel is Fulbright & Jaworski LLP.
The Tyler Junior College District's taxing area includes six school districts in Smith and Van Zandt counties. It was formed in 1926 as part of the Tyler public school system, and established by voters as an independent junior college district in 1945.
Property valuations for fiscal 2010 in the oil-rich district total $9.3 billion, an increase of 23% over the past five years. Revenue from the district's property tax account for about 18% of total revenue, with state appropriations providing 32% of total revenues, and tuition and fees about 20%.
The district operates two campuses in Tyler, about 100 miles east of Dallas. The facilities include the 80-acre main campus and a technical center. Enrollment is about 9,900 academic and vocational students, with another 18,000 non-credit, continuing education students.