Stafford leaders review bond scenarios; adviser says $80M package could avoid tax-rate increase

Clarence Greer, a financial adviser with RBC Capital Markets, told a joint meeting of the Stafford Municipal School District (SMSD) Board of Trustees and the City of Stafford council that the district could present voters with a range of school bond packages — from an $80 million proposal that would include moving a $5 million maintenance note to the interest-and-sinking (I&S) side without increasing the tax rate, up to roughly $156 million that would raise the I&S rate by about a dime — and still remain well below peer districts’ debt levels.

Greer said the district has issued 22 bond transactions totaling more than $253 million since its first borrowing in 1985, has paid off about $159 million in principal and currently has just under $90 million in voted bonds outstanding. He presented four scenarios showing how different bond totals and assumed future property-value growth would affect the I&S tax rate and monthly homeowner impacts under conservative interest-rate assumptions.

The presentation’s purpose, Greer told trustees and council members, was to start a joint discussion of affordability and timing rather than to set a bond package. He said the district’s five-year average taxable-assessed-value growth is about 8 percent, the 10‑year average is about 6.7 percent, and the scenarios presented used a conservative 3 percent growth assumption. Greer also noted that the district has used optional prepayments to reduce future interest costs and that nonvoted maintenance borrowing has been running about $350,000–$375,000 annually.

Under the most conservative scenario shown on the slides, Greer described a package of $75 million in project authorization plus $5 million to refinance the maintenance note — an $80 million total — that, based on the presentation’s assumptions, would not require an increase to the district’s I&S tax rate. Larger packages the adviser modeled included $112 million (which he said would increase the rate by roughly four to five cents) and about $151–156 million (which he said would increase the rate by about a dime). Greer cautioned that the models use a conservative 5 percent interest-rate assumption for budgeting though market rates at the time of the meeting were closer to roughly 4.25 percent.

Board and council members asked several procedural and timing questions. Greer and SMSD staff emphasized two scheduling constraints: to place a bond on the May ballot the election must be called before Feb. 14, and to place it on the November ballot it must be called before Aug. 18. Greer and staff also repeatedly advised that changes being discussed at the state level could limit local options, and they urged the joint bodies to consider timing relative to pending legislative activity.

SMSD staff announced a public long-range planning group meeting for Jan. 30 to review the district’s comprehensive needs assessment and asked trustees and council members to submit names of community members to that working group. Staff said the long-range planning group would meet again and that the joint body would schedule at least one non‑council meeting before Feb. 14 to consider action on the assessment and potential next steps.

Greer and district staff provided specifics on the $5 million maintenance note that the district borrowed for urgent repairs: about $600,000 had been spent and approximately $2.1 million was encumbered for HVAC and technology infrastructure, leaving roughly $2.3 million of the note untouched. Greer said moving that maintenance borrowing to the voted I&S side would remove the annual $350,000–$375,000 pressure on the district’s maintenance-and-operations budget.

The joint bodies then went into a closed (executive) session under the Texas Open Meetings Act (Texas Government Code sections 551.071–551.076). After returning to open session at 9:13 p.m., trustees accepted a motion to adjourn. Trustee Montelongo moved to adjourn; Trustee Thompson seconded; the vote was recorded as 6–0 in favor.

At the meeting’s close staff reiterated that no bond had been called and that the January long-range planning meeting would include the detailed project list from the district’s architect (referred to in the meeting as LEN or LAN). The district and council said they would continue the joint process, gather community feedback, and return to the joint body before the statutory deadline if they choose to call an election.