Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
New Issue:

MOODY'S ASSIGNS Aa2 RATING TO MARICOPA COUNTY ELEMENTARY SCHOOL DISTRICT NO. 3 (TEMPE), AZ, SCHOOL IMPROVEMENT BONDS, PROJECT OF 2009, SERIES B (2010)

19 Nov 2010

$139.1 MILLION OF DEBT AFFECTED, INCLUDING CURRENT OFFERING

Primary & Secondary Education
AZ

Moody's Rating

ISSUE

RATING

School Improvement Bonds, Project of 2009, Series B (2010)

Aa2

  Sale Amount

$14,270,000

  Expected Sale Date

11/29/10

  Rating Description

Unlimited Tax General Obligation Bonds

 

Opinion

NEW YORK, Nov 19, 2010 -- Moody's Investors Service has assigned a Aa2 rating to Maricopa County Elementary School District No. 3 (Tempe), Arizona, School Improvement Bonds, Project of 2009, Series B (2010) in the amount of $14.3 million. At this time, Moody's also affirms the Aa2 rating on the district's outstanding parity debt totaling $124.8 million. The current offering is secured by the district's unlimited property tax pledge. Bond proceeds will be used to upgrade the district's bus fleet and renovate existing facilities.

RATING RATIONALE

The Aa2 rating primarily reflects the district's sizable tax base, sufficient reserve levels, and a manageable debt profile.

SIZABLE TAX BASE DECLINES MODERATELY IN 2011

The 36 square-mile district is located in Maricopa County (Aaa Issuer rating with stable outlook) and primarily serves a large portion of the City of Tempe (Aa1 UTGO rating with stable outlook). The completion of a light rail system in 2008 for the greater City of Phoenix (Aa1 UTGO rating with stable outlook) metropolitan area reportedly contributes to local economic activity. The local economy also benefits from the presence of Arizona State University's (Aa3 rated revenue bonds with stable outlook) main campus, which is located within the district's boundaries. As of August 2010, the unemployment rate in Maricopa County was 8.9%, which was below state (10.0%) and national (9.5%) levels.

The district's tax base has been relatively immune to the regional housing downturn compared to other Arizona school districts since the district is built-out with only limited retail in-fill development and little new housing development. Full value grew at an average annual rate of 12.0% in years 2005 through 2010 to $15.0 billion; annual growth in full value was attributed substantially to appreciation in property valuations. The district's tax base is not concentrated as the ten largest taxpayers are diverse and represent only 5.8% of assessed value as of 2010. However, the district's full value declined by 7.6% to $13.9 billion for 2011, which reflects an eighteen-month lag in valuations and a correction to prior appreciation in property values.

As of the 2000 census, wealth measures are above the medians for Arizona school districts with per capita and median family incomes of 92.2% and 98.6% of state levels, respectively. Full value per capita is $93,767 for 2011 and historically is below the median for school districts in the state. Moody's notes that wealth measures for the district may be depressed due to the presence of Arizona State University's student population.

AVAILABLE RESERVES REMAIN ADEQUATE DESPITE STATE FUNDING CHALLENGES

The district's general fund performance fluctuated in recent years, but available reserves in the district's unrestricted capital outlay and soft capital funds bolster reserves available to support operations. In fiscal years 2005 through 2009, general fund reserves declined overall to a narrow 1.2% of general fund revenues ($986,000). The decline in general fund reserves is in part attributed to management's conscious decision to lower its operating tax rate beginning in fiscal 2008, along with pressures from state budget reductions as well as decreased state equalization funding due to declining enrollment. Including available undesignated reserves outside the general fund, the district's available reserves averaged an adequate 13.1% of general fund revenues in fiscal years 2005 through 2009.

In fiscal 2010, management anticipated and budgeted for $2.0 million of state funding reductions. Reductions were absorbed by the closure of a low-capacity campus, attrition of staff, and elimination of dental insurance coverage for employees. Unaudited financial data indicates that total available reserves will amount to a satisfactory 11.6% of general fund revenues ($9.1 million). For fiscal 2011, the district anticipated $5.0 million of state funding reductions as the state repealed the formula weight which previously supported full-day kindergarten, reverting kindergarten funding to only half-day programming. Management absorbed state reductions through attrition of staff, operating efficiencies, program reductions, and surplus state aid from the prior year. The district may face mid-year budget reductions since voters statewide recently did not approve Propositions 301 and 302, which would have transferred over $400 million of revenues to the state's general fund from its conservation and childhood development funds.

The district benefits from two budget limit overrides. In March 2010, approximately 62.0% of voters approved a M&O override which allows the district to increase its supplemental M&O budget capacity by 15.0% for fiscal years 2011 through 2015 and is reduced by one-third annually in 2016 and 2017. In November 2005, 68.0% of voters approved a capital outlay override which allows the district to increase its supplemental capital outlay budget capacity by up to $5.1 million annually for fiscal years 2007 through 2013.

After an extended period of sustained growth, enrollment declined at an average annual rate of 1.6% in years 2006 through 2010. For 2011, officials estimate an annual enrollment decline of 4.0%. Officials anticipate enrollment declines will continue over the near-term due to an aging population within the district. A study from 2008 reported that enrollment may return to growth in 2013 or 2014.

The district's other post-employment benefits (OPEB) reflected a $19.9 million unfunded actuarial accrued liability as of fiscal 2009. The district pays health insurance premium coverage for employees of at least 55 years of age who retired prior to July 2009. Management recently altered eligibility requirements to 20 years of service from 10 years previously, which should reduce long-term OPEB liabilities. Eligible retirees qualify for benefits until age 65, and employees hired after June 2004 are ineligible for the benefit. Officials note that the district has $2.5 million of reserves in supplemental funds that that may be used for OPEB liabilities.

MANAGEABLE DEBT PROFILE; NEAR-TERM BORROWING PLANS

Moody's expects the district's debt profile to remain manageable given a direct debt burden of 1.0% and additional borrowing plans. Principal payout is average 65.6% in ten years. The current offering represents the second installment of a $77.0 million general bond authorization approved by 68.0% voters in November 2009. After this issuance, the district will have $37.5 million of remaining general bond authorization, which district official anticipate issuing over the next few years for capital improvements. All of the district's voted-debt consists of fixed-rate obligations.

What could move the rating-UP

- Trend of protracted growth for the district's tax base

- Significant appreciation in socioeconomic measures

What could move the rating-DOWN

- Significant deterioration in the district's financial position

- Trend of protracted contraction for the district's tax base

KEY STATISTICS

Estimated population: 147,734

2011 full value: $13.9 billion

Average annual growth in full value (2006-2011): 8.0%

2011 full value per capita: $93,767

Direct debt burden: 1.0%

Overall debt burden: 4.3%

Payout of principal (10 years): 65.6%

Fiscal 2009 general fund balance: $986,000 (1.2% of general fund revenues)

Fiscal 2009 available general fund balance: $10.4 million (13.1% of general fund revenues)

Pension funding, 2009: 79.1% (ASRS plan)

OPEB liability, 2009: $19.9 million (UAAL)

PRINCIPAL METHODOLOGY AND LAST RATING ACTION

The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009.

The last rating action with respect to Maricopa County Elementary School District No. 3 (Tempe), Arizona was on February 2, 2010, when a municipal scale rating of A1 was assigned to School Improvement Bonds, Project of 2009, Series A (2010). That rating was subsequently recalibrated to a global scale rating of Aa2 on May 1, 2010.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of assigning a credit rating.

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

Analysts

Patrick Liberatore
Analyst
Public Finance Group
Moody's Investors Service

Andrea Unsworth
Backup Analyst
Public Finance Group
Moody's Investors Service

Matthew A. Jones
Senior Credit Officer
Public Finance Group
Moody's Investors Service

Contacts

Journalists: (212) 553-0376
Research Clients: (212) 553-1653


Moody's Investors Service
250 Greenwich Street
New York, NY 10007
USA

MOODY'S ASSIGNS Aa2 RATING TO MARICOPA COUNTY ELEMENTARY SCHOOL DISTRICT NO. 3 (TEMPE), AZ, SCHOOL IMPROVEMENT BONDS, PROJECT OF 2009, SERIES B (2010)
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​
Moodys.com