The Midland City Council learned Tuesday that a lower-than-estimated interest rate on the first round of borrowing for the road bond will mean a break for the taxpayer.
The Midland City Council learned Tuesday that a lower-than-estimated interest rate on the first round of borrowing for the road bond will mean a break for the taxpayer.
The Midland City Council learned Tuesday that a lower-than-estimated interest rate on the first round of borrowing for the road bond will mean a break for the taxpayer.
The council learned it will pay a 3.45-percent interest rate on the first $25 million it is borrowing for the road bond, which promises to rebuild parts of 36 roads across Midland. The four projects this year are: Taylor Avenue (between Lamesa Road and Mineola Street), Hicks Avenue (between Lamesa Road and Terrell Street), Cuthbert Avenue (between Garfield Street and “A” Street) and Green Tree Boulevard (Holiday Hill Road and Midland Drive).
Councilman J.Ross Lacy said at the meeting that 90 percent of the utility work on those year-one projects that require such work (Cuthbert and “A” Street don’t) is completed.
“They should be paving in March,” he said.
It was confirmation of Lacy’s belief that the projects -- which are part of the $100 million bond plan -- will be executed “on time and on budget.”
Still, the interest rate development was even more good news for city leaders. Officials had used a 4.5 percent interest rate during the campaign. City officials figured that percentage to be conservative. Based on that rate, they expected interest to be around $67 million. The interest on the first $25 million was around $16 million, according to a city report. City Finance Director Pam Simecka said afterward that doesn’t mean interest rates connected with future debt won’t climb. She also said the taxpayer will get a break on their tax bill – one-tenth of a cent (per hundred-dollar valuation).
During the campaign, it was stated that the owner of a property valued at $250,000 will see a $100-a-year increase in his or her city tax bill when all debt is issued.
The bond financing report during the meeting was part of a larger report, which included the refinancing of other city debt from 2007 that officials said brought $7.7 million in savings to the city. All totaled, $63.325 million in bonds were financed or refinanced in two different “series” called 2018A and 2018B.
The presentation on Tuesday also included that Fitch Ratings gave the city of Midland an “AAA” rating, while S&P Global give the city an “AA+” rating.