DALLAS — A citizens’ bond committee from the Round Rock Independent School District earlier this month recommended a $350 million referendum for the November ballot. But though that number has seen been scaled back, some school officials still worry the amount may be too high and could be rejected by voters in the growing suburban district just north of Austin.
Randy Staats, accounting director for the district, said the potential bond package has already been pared down to $296 million, adding that the school board meets again next week and may modify, add, or delete projects on the referendum.
A $267.7 million bond package split out in four propositions was approved in November 2006, but a $349 million single referendum was rejected the year before.
Staats said there was an organized political action committee opposing the largest bond package in district history in March 2005, and “a lot of misinformation was out there.” He said the coming bond package will most likely be split into separate propositions because “that’s what the voters like to see.”
The construction needs of the growing district are obvious. Current enrollment in the school system’s 42 campuses is about 40,500. The district had been adding nearly 1,200 to 1,500 students annually for a few years, but growth moderated to roughly 600 new students this year. A decade ago, the district served slightly more than 26,000 students, and officials project an enrollment of 45,000 by 2013.
Ahead of the issuance of $126.4 million of unlimited-tax general obligation bonds earlier this year, Standard & Poor’s upgraded the underlying credit of the district to AA from AA-minus, citing a rapidly expanding economy and tax base and strong financial performance. The upgrade applied to about $405 million of debt outstanding, and the district has about $38.2 million of unissued debt remaining from the 2006 authorization. Staats said the district will bring that debt to market early next year to complete the projects laid out in that bond package.
Round Rock ISD doesn’t qualify for the triple-A enhancement provided by the state’s Permanent School Fund due to the rapid growth that has pushed the debt per student above the $1,250 maximum allowable under the program.
The district’s taxable assessed value has averaged 6.4% annual growth over the past five years to $17.19 billion for fiscal 2008, according to analysts.
In the upgrade note, Standard & Poor’s said Round Rock has posted operating surpluses in each of the past five fiscal years despite the pressures associated with rapid enrollment growth.
Moody’s Investors Service rates the district’s underlying credit at Aa2, while Fitch Ratings doesn’t rate the credit.
First Southwest Co. is the financial adviser and Vinson & Elkins is bond counsel.
Round Rock was home to less than 25,000 people in 1980, and about 61,100 in 2000. Now nearly 96,000 people live in the once rural community. Dell Computer Corp., which was founded in 1984, has its headquarters in Round Rock.
The school district serves a total population of nearly 190,000, drawing students from Round Rock, Austin, and Cedar Park.