DALLAS — The Mansfield Independent School District continues to add up to 1,800 students a year and has four new schools under construction to keep pace with the growth.

Next week, the suburban district about 20 miles southeast of Fort Worth plans to issue $80 million of unlimited-tax school building bonds through a negotiated sale led by Morgan Keegan & Co. RBC Capital Markets and Southwest Securities are co-managers for the issue.

The Series 2008 bonds, which come to market backed by the triple-A rated Texas Permanent School Fund, are structured as serials with final maturity in 2033.

First Southwest Co. is the financial adviser to the school district and McCall, Parkhurst & Horton LLP serves as bond counsel.

Lou Spiegel, associate superintendent for business and government affairs, said while the rapid growth the district has been experiencing this decade has cooled somewhat, the large influx of new students continues.

“We’re still doing demographic studies each year and while the level of new kids to the district has dipped a bit, we still have about 1,700 to 1,800 new students each year,” she said. “And, of course, the more schools you have, the easier it is to handle the growth.”

The district currently serves about 30,000 students at 35 campuses. Officials anticipate a total enrollment of nearly 40,000 by 2013. Proceeds from next week’s issue will be used to continue construction of a new elementary school, a middle school, an intermediate school, and a high school.

Spiegel added that the district hasn’t really been hurt by rising construction costs and plans “to meet all the promises made to voters in 2006.”

District officials have exhausted a 2003 bond authorization for four new schools, a new stadium, and new auditorium. Most of a $241.5 million bond package narrowly approved by 51% of voters in May 2006 has been sold and the district will have about $52.6 million remaining following next week’s sale.

Spiegel said the district plans to bring that final tranche to market next summer. She added that officials may look to put another bond referendum before voters sometime in 2010.

Fitch Ratings assigned an AA-minus underlying rating to next week’s sale and affirmed the AA-minus rating on the district’s $643.3 million unlimited tax bonds outstanding. Fitch analysts also revised the outlook to positive from stable due to the district’s “continued favorable financial performance and large fund balances.”

Analysts also said an upgrade is “likely if the district can retain its currently strong financial status despite projected slowing in enrollment and tax base growth.”

Officials managed to increase the district’s undesignated fund balance to $56.9 million for fiscal 2007 and have balanced the 2008 budget, including the staff additions necessitated by the new schools, according to analysts.

Fitch said Mansfield ISD is the third-fastest growing school system in the Lone Star state, averaging 11% enrollment growth the past five years.

Moody’s Investors Service assigned its Aa3 underlying rating to the issue. Analysts said the rating reflects a rapidly growing service area, increasing wealth levels, and a strong management team that the agency “believes has demonstrated an adept ability to handle the fast growth.”

The district’s tax base average 13.3% growth the past five years to “a sizeable $7.8 billion” for fiscal 2008 and preliminary estimates have the 2009 full valuation rising to $8.8 billion, according to Moody’s.

Standard & Poor’s rates the district’s credit AA-minus.

The estimated 2007 population of the city of Mansfield has more than doubled since 28,031 at the 2000 Census to nearly 59,000. The formerly rural area was just a small town back in 1980, home to about 8,100 people.

The total population of Mansfield ISD, which also extends south into Johnson County and north to Arlington, is about 157,400. q



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