Sulphur Springs City Council Tuesday evening approved on second and final reading an ordinance authorizing issuance and sale of $12 million in combination tax and revenue certificates to fund infrastructure on the old Thermo mine property to jump start development of the property.
Andrew Freeman, finaical avisor, told the City Council that three bids were received through the online portal that satisfied the stipulations established for the sale of the bonds. A fourth bid came in late, but technical problems with the platform where the bids were uploaded made it late. The bidder would not have won the contract had it been received on time, however, Freeman noted.
Robert W. Baird and Co.’s bid won. The funds are to be financed at 4.12% interest to be paid back over 30 years. Payment will come from city I&S tax funding as well as utility revenues. Certified values for city tax rolls won’t be final until next week, but no I&S tax rate increase is expected to be needed to fulfill the city’s annual debt obligation payable annually on Sept. 1, starting in 2025, Freeman told the City Council. Overall $3 million will go to the general fund and $9 million to the utilities fund. Of that $11,795,000 will go toward the project and $556,000 will go toward related fees.
The maximum maturity date of the certificates to be authorized is Sept. 1, 2054.
Place 1 City Councilman Jay Julian noted there was no itemized list in the packet, presented that he could see, and asked how the projected cost for I&S tax impact was figured. Freeman noted it included fees and associated costs including those for attorney, rating agency, the registrar and Attorney General’s Office.
The City Council gave first approval July 2 of Ordinance No. 2858, which authorizes the city to sell $12 million in bonds to help fund infrastructure development to further industrial development of the old Thermo mine property. The City, at one point, received a grant for $2.4 million to help rebuild the road into the property so that businesses can access the area.
The funds will also pay “all or a portion of the Issuer’s contractual obligations incurred in connection with: (1) street and road improvements and related drainage, signage and lighting; (2) constructing and improving the City’s water and sewer system consisting of new water and sewer lines; and (3) paying fees for legal, fiscal, engineering, architectural and other professional services in connection with these projects.”
Place 5 Councilman Gary Spraggins made the motion, which Place 6 Councilman Tyler Law seconded, to approve Ordinance 2858 “authorizing the issuance and sale of City of Sulphur Springs, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2024; levying an annual ad valorem tax and providing for the security for and payment of said certificates; approving an official statement; providing an effective date; and enacting other provisions relating to the subject.” The City Council unanimously agreed, passing the Ordinance for the funding.
Voter approval is not required for the funding as certificates of obligation were issued instead of general obligation (GO) bonds, which do require voter approval. The only time COs would require voter approval are when 5% of qualified voters within the jurisdiction petition for an election on the spending in question, according to Texas Comptroller’s office.