Title
A resolution approving a Five-Year Capital Improvements Budget for the Spradley Farms Improvement District of Kaufman County and waiving the requirement for the District to assess an ad valorem tax for debt service at a rate of not less than $0.38 per $100 of taxable assessed valuation.
Body
Under terms of the Spradley Farms Amended and Restated Master Development Agreement (“Agreement”), and in accordance with Chapter 375 of the Texas Local Government Code, before the District may issue bonds to finance public improvements, the District must obtain approval from the City Council of a capital improvements budget for a period not to exceed five years.
The initial Capital Improvements Budget was approved by the City Council on July 6, 2020, and will expire on December 31, 2025. The proposed resolution establishes a new Capital Improvements Budget for the calendar years 2025 through 2029, attached as Exhibit A to the proposed resolution.
The resolution also allows the District to finance the first series of bonds at an ad valorem debt service tax rate of less than $0.38 per $100 of assessed valuation as a conditional waiver to the Agreement. The City’s financial advisor has reviewed the District’s bond financing projections and agrees that the one-year waiver of the debt service tax rate limitation is necessary for the District to meet certain Texas Commission on Environmental Quality requirements for approval of the bonds. This resolution does not change the overall benchmark tax rate limitation of $0.54 per $100 of assessed valuation, which includes the maintenance and operations portion of the tax rate, as specified in the Agreement.
If approved, the District may issue bonds to finance capital improvements specified in the 2025-2029 Capital Improvements Budget without further approval from the City Council as long as the bonds meet the limitations specified in the Agreement and the District is in compliance with the Agreement and State law. To date, the District has not yet issued any bonds.
Recommended/Desired Action
Staff recommends approval of the resolution.
Attachment(s)
Resolution
Drafter
Ted Chinn
Head of Department
Cliff Keheley