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Finance director says growth-related debt led to small solvency score variance for HUTTO ISD
Summary
Director of Finance Jeffrey Lapp told the board the district saw a two-point solvency variance tied to debt relative to district property values; he attributed the variance to fast growth and property values catching up.
At the special-called meeting, Jeffrey Lapp, HUTTO ISD director of finance, said the district's long-term solvency indicator showed a two-point variance driven by a relationship between debt and district property values. "Since we are a fast growth district, we have to take on more debt in order to keep up with that growth," he said, and noted property values are starting to catch up which improved the ratio.
Lapp explained that the solvency indicators include measures such as fund balance trends, days cash on hand and debt coverage. He said the district improved two points from the previous rating period and that the particular variance is common for fast-growth districts, where rising debt to finance capacity can temporarily depress the metric until property valuations rise.
