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Located on the first floor of the Smith County Annex Building
200 E. Ferguson, Suite 100
Tyler, Texas 75702
Email: Casey Murphy
Commissioners Approve Sale of Road Bonds
The Smith County Commissioners Court on Tuesday voted to approve the sale of the second year of road bonds at an extraordinarily low interest rate after receiving eight competitive bids.
In November 2017, Smith County voters approved a $39.5 million bond package to improve county roads. More than 50 miles of road improvements have been completed in the first year.
On Monday, Specialized Public Finance Inc. bid general obligation bonds, which will net the county $11.32 million towards the second year of the first phase of the three-year bond package.
Smith County received eight bids on the bonds, with BOK Financial Securities, Inc. submitting the winning bid at a true interest cost of 1.837 percent.
The bonds are rated AA+ by Standard & Poor’s Rating Services, which is equivalent to that of the United States federal government.
“For a county, it is extraordinary to have an AA+ rating,” Smith County Judge Nathaniel Moran said, adding that it is about as high as a county can get. He credited the hard work of the Smith County Auditor’s Office, the fiscal responsibility shown by the Commissioners Court and the good economic growth of the county in the last few years.
Moran said the interest rate of less than 2 percent was extraordinary and said it was a good day at the stock market for the sale.
Steven Adams, managing director of Specialized Public Finance Inc., gave a brief presentation to the Commissioners Court, and said Smith County’s very high rating of AA+ helps the interest rates on the 10-year maturity bonds. He said because of the low interest rate, the numbers will remain within the tax rate told to voters during the bond election.
The bonds increased the I&S portion of the tax rate by 0.7 cents per $100 valuation.
Adams recommended that the court award the General Obligation Bonds Series 2019, to BOK Financial Securities, Inc. The court voted unanimously to follow his recommendation, with the exception of Commissioner JoAnn Hampton, who was not in court Tuesday.
Adams said once the documents are signed by county officials, they will go the Attorney General for Approval. He expected to close on the sale on June 11. The county will receive the bond proceeds into the construction fund next month.
Commissioner Jeff Warr said the timing of the road bond election was perfect, and they have been able to complete some projects that have been put off for decades.
So far in year one of Phase I, through April, Smith County has spent $9,915,575 in road projects paid for by bond funds. This includes 42.127 miles of asphalt overlay projects completed by Smith County Road and Bridge crews for about $3,784,797. Contracted projects include 8.75 miles of road improvements completed for $2,350,778; and 15.97 miles under construction, with the anticipated completion this summer, for $3,780,000. Smith County also has several engineering design contracts for future road improvements that are funded in the first year’s bond program, Smith County Engineer Frank Davis said.
This year’s bond sale saw a better fixed interest cost than last year’s lower-than-expected rate of 2.499 percent. Last year, Fidelity Capital Markets submitted the lowest of 12 bids.
The bonds are planned to be issued in three parts over three years.