A major credit-rating service has awarded high marks to McAllen ISD.
Moody’s Investors Service has assigned an Aa2 rating to McAllen Independent School District’s $28.4 million Maintenance Tax Notes, Series 2020.
Moody’s maintained the Aa2 rating on the district’s outstanding maintenance tax notes (GOLT) and general obligation unlimited tax (GOULT) debt.
The Aa2 GOULT rating reflects, in part, the district’s strong financial position and relatively low, manageable debt and pension liabilities.
The Aa2 limited tax rating is the same as the GOULT rating, reflecting the ample available taxing headroom under the Maintenance and Operations (M&O) tax rate to pay debt service on the notes.
A Maintenance Tax Note is a debt instrument issued for the purpose of maintaining property already owned. It allows repairs and renovation of a significant level to be paid over an extended period from the Maintenance and Operations portion of property tax collections.
These funding sources cannot be used for “new construction.” They can only be used in connection with environmental cleanup, maintenance, repair, rehabilitation, replacement of heating, air conditioning, roofing, electric, or other facility needs of existing school properties. Every project is in compliance with the District’s Facilities Master Plan.
With a focus on safety and other capital improvements to benefit students now and in the future, the McAllen ISD School Board approved going out for a $28.4 million Maintenance Tax Note on December 9, 2019.
This note would not increase our constituents’ taxes. The District would be able to leverage its current outstanding bond rating to secure low interest rates and sell the note. It would be paid back over a 20-year period.
Some of the safety projects include:
• Gates at elementary and middle schools to control access to playground areas
• Exterior door access at all campuses
• Fire alarm replacement
• Intercom replacement
The Maintenance Tax Note will allow the District to augment projects completed under the Tax Ratification Election which voters passed in Sept. 2018. The TRE also resulted in no increase to our total tax rate.
These projects include science labs at the District’s high schools and auditorium improvements. Eight new science labs were constructed with funds from the TRE. The Maintenance Tax Note, will allow for the high school labs to be improved.
Renovation of the District’s auditoriums began in the summer of 2019. The Maintenance Tax Note would implement Phase Two of that project (i.e. improved lighting for fine arts).
Additional improvements would address roofing, HVAC, paving and drainage needs at multiple campuses.
This will ensure the District can continue to provide the best facilities possible for students of today and tomorrow.