Moody's Investors Service - General Obligation Bonds

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

  • Not applicable

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.

Regulatory Disclosures

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