DeSoto council approves notice of intent to issue certificates of obligation for $48M in infrastructure projects

The DeSoto City Council voted 5-2 on March 4 to approve a resolution authorizing the publication of a notice of intent to issue certificates of obligation to fund a package of capital projects the city said are needed for streets, parks and water and sewer infrastructure.

Finance Director Tracy Cormier told the council the city proposes using certificates of obligation to fund projects that include the county/city joint Westmoreland Road project ($9,000,000); traffic-signal renovations ($750,000); a new traffic signal ($400,000); alley reconstruction ($1,000,000); concrete street repair ($1,500,000); asphalt street repair ($1,500,000); the aquatic and recreation center and city parks ($20,500,000); city entryway and digital signage ($500,000); Wolf Creek drainage ($2,400,000); water and sewer capital projects ($10,000,000); and Nance Farm renovation ($1,000,000). The listed project total in staff presentation was approximately $48 million.

Councilmembers pressed for detail about how funds would be allocated and what would happen if the council declined to approve the notice. Dr. Diana Marks asked whether Westmoreland Road would be funded; staff replied the $9 million in the notice is intended for the city’s portion of that joint project and that the design phase is complete. City manager and staff explained the city budgets capital projects in phases (design, right-of-way, construction) and that projects can appear on multiple bond or CO issuances as phases are funded.

Financial adviser Andre Ayala of Hilltop Securities told the council DeSoto has a "double A" credit rating and that, based on staff projections and reasonable assumptions about growth, the city should be able to carry the proposed five-year capital plan without a tax-rate increase. Ayala said interest-rate assumptions used in budgeting were about 4.2 percent and that, if market conditions deteriorated, staff and the adviser would pause and re-evaluate timing before issuing bonds.

Councilmember Crystal Chisholm and others asked for clarity about prior CO sales and which earlier bond proceeds had been drawn or spent; staff said projects like Westmoreland had earlier appropriations for design and right-of-way and that the notice would supply the final funding tranche to move to construction if matched by county and grant funding. Staff also warned that delaying the planned certificates could pause construction on active projects such as the aquatic center.

Resident Scott McDonald used the citizen-comment period to criticize the city's ongoing real-estate purchase and financing for a separate property (the former Oscar Epps church site), warning council it had placed taxpayer funds at risk. McDonald said the city paid roughly one-third of a roughly $7 million purchase and that remaining payments were uncertain; he called the arrangement "Russian roulette with taxpayer money." The comment was delivered during citizens’ appearances and was not part of the formal action on certificates of obligation.

The motion to approve the resolution authorizing publication of the notice of intent to issue certificates of obligation was adopted on a roll-call vote: Mayor Pro Tem Leticia Hughes, Councilmembers Crystal Chisholm, Rachel Proctor, Nicole Rafael and one other voted yes; Dr. Diana Marks and Councilmember Brett Parker voted no. The resolution permits staff to publish the statutorily required notice of intent and to distribute preliminary official statements to potential underwriters and investors; final issuance would return to council after public notice and any required public hearing.