Released by Lindale ISD:
LINDALE, TX - Standard & Poor's Ratings Services raised its issuer credit rating (ICR) on the Lindale Independent School District, Texas' general obligation debt four notches from a rating of 'BBB' to an 'A+'.
General obligation debt is from bonds issued with the belief that the district will be able to repay its debt obligation through taxation or revenue from projects.
The new rating will save LISD tax payers an estimated $1.6 million on the $42.2 million bond package passed in November over the next 20 to 25 years. According to the rating service, the rating action affects roughly $25.6 million of prior outstanding debt.
Standard and Poor's also affirmed its 'AAA' rating with a stable outlook on the district's general obligation debt.
The rating services said budget cuts and enrollment growth have helped the district run annual general fund surpluses since the 2006 fiscal year.
The general fund balance is in place to meet the district's operating needs.
The Standard & Poor's rating report said the A+ rating is based on the "the district's significantly improved financial position, evidenced by a rapidly increasing unreserved fund balance to very strong levels and the maintenance of good financial management practices."
The general fund balance increased to $5 million in fiscal 2008 from $1 million in fiscal 2006. District officials expect to maintain $5 million of reserves for fiscal 2009 and $4.5 million in fiscal 2010.
"We are very pleased with the financial rating upgrade," LISD Superintendent Stan Surratt said. "We feel this higher rating is an appropriate reflection of our district finance and business practices. What's best about it, is that this will save our tax payers money over the life of the bonds. That means a lower I/S (interest/sinking) rate for Lindale ISD tax payers."