Ellis County’s improved bond rating has resulted in savings.
“This is the first bond sale the county has had in a long time, and your staff and (County Judge Chad Adams) worked very hard,” Jim Sabonis, senior vice president of First Southwest Company and the county’s financial advisor, told county commissioners Monday. “(County Auditor Mike Navarro) prepared a bond rating presentation and met with two bond rating agencies and I’m really pleased to tell you that you got a great rating.”
According to Sabonis, the county’s upgraded bond rating - from A1 to Aa3 and AA- by Moody’s Rating Agency and Fitch Ratings respectively - resulted in tangible savings.
“When we did our planning, we expected that you would pay insurance of 32 basis points, and instead you will be paying 13.9, which means that your insurance cost was reduced by $170,000,” Sabonis said. “Also, on the fair market yield curves, the difference from A+ to AA- was on average three to five basis points cheaper - an interest savings of $247,000 by being upgraded.”
These two things, combined with a pricing difference negotiated by Banc of America Securities, added up to $1.4 million in savings in the overall cost of the bond offering. Banc of America Securities LLC was selected by the commissioners on July 30 as the head underwriter for the issuance of the bonds, with A.G. Edwards & Sons, RBC Capital Markets and Southwest Securities each accepting a percentage of the risk (70-10-10-10).
“When we did our planning, we expected there would be $100.3 million total principal and interest,” Sabonis said. “As a result of these cost savings, the total cost will be $93.9 million, $6.4 million under what we told the public. This means a lot - this is good news.”
Rob Collins of Vinson & Elkins LLP, the county’s bond counsel, told commissioners the bond order he had prepared included the final pricing information as presented by Sabonis.
“It awards the insurance policy,” Collins said. “It also has in there that your bond election was for $53,875,000 and you will have $53,865,000 in your construction fund - almost your full voter authorization can be utilized for your construction costs.”
In a related item, the commissioners authorized county engineer Joe White to set up an initial orientation meeting of the Ellis County Bond Oversight Committee, as well as authorizing that committee to set up a five-member executive board.
“I move we authorize Joe White to set up an initial meeting on Aug. 20 at 6 p.m. in the second floor courtroom,” said Commissioner Heath Sims, Pct. 3.
Commissioners also listened to a report from Rachel Connell and Tiffany Melvin of North America’s Super Corridor Coalition.
“Over the last year, we’ve come under a lot of publicity - conspiracy theorists out there saying we were creating a North American Union, creating an amero, anything we could be accused of,” Connell said. “We are absolutely not doing any of those things.”
According to Connell, NASCO exists to unite both the public and private sectors to ensure that the Interstate 35 Corridor is globally competitive from Mexico to Canada.
County Extension agent Mark Arnold was on hand to present a certificate to Commissioner Dennis Robinson, Pct. 1, recognizing his participation in the 48th annual County Judges and Commissioners’ Continuing Education Conference through the V.G. Young Institute of County Government. Certificates had been presented to other commissioners at a previous meeting.
In other business, commissioners:
Took no action on a proposed interlocal agreement with the city of Mansfield relating to participation in a tax increment zone; Approved a Solid Waste Facility Siting Ordinance specifying areas in the unincorporated portion of the county where solid waste disposal is not prohibited; Lowered the amount of the family protection fee from $30 to $15 in accordance with House Bill 764, effective Sept. 1; Extended its agreement with the Texas Commission on Environmental Quality for funding for the Aircheck Texas program; Approved a final plat, two preliminary plats, construction of infrastructure in La Rinconada Phase Three, Shiloh Downs 3 and Shiloh Forest 2 and took no action on a second final plat under the department of development; Discussed proposed changes to the on-site sewage facility rules and regulations with no action taken; Awarded the purchase of one pickup to Caldwell Country Chevrolet, approved purchase of steel outside the existing bid due to the fact that the approved supplier does not stock the size that was needed, and declared three printers from the elections office as surplus under the purchasing department; Approved two work orders under existing interlocal agreements in Pct. 2.