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Tuesday, January 10, 2017

ACC Bond Rating Upgraded by Fitch

Alvin Community College’s bond rating was upgraded to AA recently by financial information services firm Fitch Ratings.

The financial rating was upgraded due to many factors including revenue levels and stable operations.

“Ample revenue-raising ability, solid expenditure control, and a sound operating cushion provide the district with a high level of fundamental financial flexibility throughout the economic cycle,” according to the Fitch report. “Management anticipates maintaining structural balance and modestly positive operations after a period of fiscal pressure.”

Fitch also reported a strong financial outlook for ACC’s future.

“Further economic and tax base gains appear likely to Fitch given the area's ongoing housing development, growth in the medical/health care sector, and some industrial expansions underway,” according to the report.

Board of Regents Chair Mike Pyburn said the new rating is a result of sound planning and growth in the ACC district.

"We are pleased that a growing tax base along with our intentional efforts to control cost and build up the college's reserve fund have lead Fitch to upgrade the bond rating,” he said. “As a governing board and administration, one of our main goals is to provide for sound management of Alvin Community College funds and resources. We believe this upgrade indicates we are on the right track and are encouraged this will help lower borrowing cost going forward."

The upgraded rating will provide improved interest rates for the college.

“We’re very excited to receive a ‘very strong’ rating,” said Karl Stager, ACC Vice President of Financial Services. “The economic outlook of ACC improved significantly due to an increase in students to our second highest enrollment ever along with the sale of our Pearland Center property.  Where this will help the college is that we will be eligible for lower interest rates on any new debt that we issue in the future, including the refinancing of any existing debt.”

 

The college has $12.3 million in outstanding bonds from the $19.9 million bond issue approved by voters in 2005.

Bonds payments are approximately 1.9 cents per $100 of appraised property value which is less than the initial projection of 3.5 cents in 2005.

For more information, visit, www.alvincollege.edu or call 281-756-3500.

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