KBRA Affirms AA+ Rating for Pflugerville Independent School District Unlimited Tax Bonds

17 Jan 2024 | New York

KBRA affirms the long-term rating of AA+ with a Stable Outlook for the Pflugerville Independent School District's Unlimited Tax Bonds (Non-PSF).

The rating was affirmed because of the following key credit considerations:

Credit Positives

Strong financial performance, supporting a healthy reserve and liquidity position.
Sizable and diverse property taxable base that has grown at an impressive CAGR of 14.85% (FY 2015 through FY 2023) despite the affects of the COVID-19 pandemic.
Manageable long-term retirement liabilities (pension and OPEB), and moderate overall fixed cost burden.

Credit Challenges

Continued expansion of charter schools within PfISD’s service area, somewhat tempering enrollment growth.
Property tax levy limitations could adversely impact expenditure flexibility.
Slightly elevated overall net debt burden when incorporating obligations issued by overlapping governmental entities.

For Upgrade

Continued favorable financial operating performance further bolstering unassigned reserve levels and available liquidity (cash & current investments).
The continued realization of robust tax base and associated ad valorem revenue growth.
A tempering of debt metrics, either by principal amortization or continued tax base appreciation.

For Downgrade

While not expected, a declining trend in the taxable base.
An erosion in reserves or unrestricted liquidity to levels no longer commensurate with the rating level.
A material spike in borrowing and corresponding overall net debt metrics.

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