New York, May 23, 2025 - Moody's Ratings (Moody's) has
affirmed the Aaa rating on the Dallas College, TX's general obligation
unlimited tax (GOULT) and outstanding general obligation limited tax (GOLT)
obligations. Concurrently, we affirmed the stable outlook. The district has
about $319 million debt outstanding as of fiscal 2024 year end.
Ratings Rationale
The Aaa rating is supported by a large tax base of $423 billion favorably
located in the Dallas-Fort Worth-Arlington MSA. The tax base is expected to
keep growing with ongoing residential development, albeit at a more tampered
pace than previous years. Enrollment has increased, and management projects 5%
growth for the next two years due to investments in workforce training and
baccalaureate programs. The financial position is strong with liquidity at 39%
of fiscal 2024 revenue. Liquidity is further improved when accounting for long
term investments at 66% of total revenue. Reserves will remain strong due to
conservative budgeting and expected balance operations for fiscal 2025. The
debt burden is low at 0.08% of fiscal 2025 full value and is expected to
increase because of additional debt plans. The debt profile will remain
manageable given rapid pace of amortization, active defeasances, and tax base
growth. The rating also considers moderate resident income indices and low
average pension burden.
The lack of distinction between the pledge specific rating and the GOLT
ratings reflect the ability of the college's board to override the statutory
tax cap and levy a tax rate in excess of the statutory limit in the event of a
tax base contraction.
Rating Outlook
The stable outlook reflects our expectation that the college district's very
broad tax base will continue to support its property tax revenues and allow
the district to maintain its very strong financial position even as it
continues to address significant capital needs.
Factors That Could Lead to an Upgrade of the Ratings
Factors That Could Lead to a Downgrade of the Ratings
-
Significant additions to the debt burden above 0.75% of full value and or 2x
operating revenue
-
Sustained deterioration to cash or fund balances below 25% of revenues
- Significant tax base contraction
Profile
Dallas College is a public community college district that is coterminous with
Dallas County. The college has a Fall 2025 enrollment of approximately 75,000
students.
Methodology
The principal methodology used in these ratings was US Special Purpose
District General Obligation Debt published in February 2025 and available at
https://ratings.moodys.com/rmc-documents/437940. Alternatively, please see the Rating Methodologies page on
https://ratings.moodys.com for a copy
of this methodology.
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