Midlothian Receives Favorable Interest Rate on $12M General Obligation Bond

Midlothian City Council
Top left Mike Rogers, Mayor Justin Coffman, Ed Gardner, (front row, from left) Clark Wyckliffe, Hud Hartson, Anna Hammonds and Allen Moorman. Photo courtesy City of MIdlothian

MIDLOTHIAN – The Midlothian City Council passed a regular agenda item unanimously 6 – 0 to authorize the issuance and sale of a General Obligation Bonds, Series 2023. The bond was approved by voters in 2021. The accepted bid was from Raymond James and Associates at 3.98% (Councilmember Place 6 Hud Hartson was not in attendance).

Andrew Freeman from Samco Capital Markets explained to the council this was a favorable interest rate for the $12 million general obligation bond.

Five bids were received, but Raymond James and Associates offered the lowest interest rate.

“This went along with our projections,” Freeman said. “We have been running interest rates conservatively at 4.375% during the planning process.”

The final numbers for the general obligation bonds will be delivered in September in a debt deposit. Raymond James will pay a premium of $554,000. Freeman also explained they only had to issue $11.665 million but still receive $12 million, which will be amortized over 20 years with a 10-year call option to redeem the bonds for an interest rate savings.

Midlothian residents Lisa Healy and Stacy Mayfield asked the council to refrain from approving the bonds.

“By approving these bonds, you are handcuffing yourself to the .65% tax rate,” Healy said. “Do not put a burden on already overburdened taxpayers of Midlothian.”

Councilmember Place 1 Allen Moorman asked Midlothian City Manager Chris Dick if the bonds did force a 0.65 tax rate approval.

Dick said, “The payments do go into the calculation to set the overall tax rate, but we talk through the budget about potential tax notice. All things being considered, these bonds, the tax note, the budget would ultimately be where the .65 cents is set.”

However, Dick explained the bonds would not force this tax rate.

It was noted that this is separate from the tax note the city had previously discussed; that was the gap between the 0.62 and the 0.65 and a different bond package.

The Council unanimously nominated Jan Davis for the Ellis Appraisal District Board of Directors. The vacancy occurred due to the resignation of John Knight.

Davis and two other names were also nominated by the Midlothian ISD.

Final discussion and a vote on the budget and tax rate will be held at a September 5 special meeting.

A public hearing was discussed regarding the proposed FY 2023-2024 Annual Operating Budgets for the city was passed, with Healy speaking against them during public comments. The item proposed a tax rate of 0.65 with an M & O rate of 2.39455 with interest or debt portion at .320545, which will generate a 100% collection rate at $21,207,074 for M&O and $20,633,536 for I & S.

A public hearing to act upon an ordinance amending the City of Midlothian Zoning Ordinance and Zoning Map relating to the temporary zoning designation of 1,150± acres of the property annexed into the Corporate Limits of the City saw no action. The amendment was to change the zoning classification of the 350± acres described for (Tract A) to Agricultural (A) Zoning District and change the zoning classification of 800± acres (Tract B) to a Single Family Two (Sf-2) Zoning District.

Several residents spoke and reminded council people moved to Midlothian to enjoy its current lifestyle, and controlled growth is critical to this lifestyle.

The Planning and Zoning Commission voted to deny this item 6-1. There was discussion regarding the portion of Tract B be zoned Agricultural instead of residential to reflect deed restrictions currently applied to that portion of Tract B. The deed restrictions were applied by the Salvation Army prior to their sale to Bay Harbor, which subsequently sold said property to Highland Lakes LLC.

Consent agenda items passed 5 – 0; Moorman was not at the meeting to vote for this item

These items included the approval of the City Council minutes from meetings August 4, 8 and 11, 2023, approval of minutes from the Mid-Way Regional Airport Joint Airport Board meeting of July 13, 2023, an ordinance resolution approving the negotiated rate settlement with Atmos resolving the 2023 Rate Review Mechanism filing, an ordinance approving the 2023 annual service plan update to the service and assessment plan, including the assessment roll, for the Redden Farms Public Improvement District (PID) as amended, and an ordinance approving the 2023 annual service plan update to the service and assessment plan, including the assessment roll, for the Westside Preserve Public Improvement District (PID) as amended.