The 84th Legislature passed HB 1378 to increase the transparency of local government debt. As a result, the District must annually compile their debt obligation data from the preceding fiscal year and post the information on the District’s Web site.
Moody’s Bond Rating –Aaa
Fitch Bond Rating AAA
Round Rock ISD maintains a conservative approach in the administration of its debt and has implemented strategies to effectively manage the impact of debt. For a growing district like Round Rock, the District balances the need for additional facilities for a growing student population as well as maintaining the existing investment in facilities and equipment, with the impact on taxpayers. The District employs the following practices:
Rapid Repayment of Debt
While state law allows the financing of debt over a maximum period of 40 years, the maximum maturity on debt issued by Round Rock has been 25 years. The District’s principal debt outstanding as of June 30,
Repayment of Debt Within Useful Life of Asset
When planning for a bond sale, District officials work with the District’s bond financial advisor, employed by a public finance firm. New debt is layered over existing debt in an effort to maintain an amortization schedule that is aggressive in repayment of debt without over-burdening taxpayers. Debt levels over the upcoming five years are already established with existing debt when a sale takes place. However, in accordance with the Board approved Fiscal and Budgetary Strategy, the debt associated with technology equipment is layered over existing debt to ensure repayment over five years, the useful life of computers and related equipment. This “
Round Rock ISD is the only Texas school district with
Due to enrollment growth and the need for additional student seats, the District has incurred sizable amounts of debt in the last five years. However, Round Rock continues to have one of the lowest debt per student ratios and interest to principal ratios when compared to its peers. In addition, the use of Build America Bonds (BABs), a debt product available through federal stimulus legislation, will account for savings in excess of $32 million over the twenty-five years of its issuance.
Although facing annual enrollment growth, Round Rock ISD has not over-burdened taxpayers in its long-term planning of facilities. In a press release dated September 13, 2012, Fitch Ratings stated that “School officials have not over-built, relying on portable structures to supplement permanent facilities….”
The conservative philosophy of the District in its debt administration, its financial performance and resulting credit rating, and shortened maturity schedule saves millions of dollars for taxpayers over the long run. The continued use of these strategies will be necessary as the District continues to grow.
The District considers accelerated retirement and restructuring of its outstanding debt when financially advantageous or beneficial. Bond refunds are considered in order to achieve interest cost savings or to remove or change burdensome bond covenants or restructure the stream of debt service payment. The District refunded bonds in 2005,2009,2010 and 2015. The