Stafford property owners could see lower debt-service bills after the City Council and Stafford Municipal School District Board of Trustees jointly authorized up to $4 million in refunding bonds at their Tuesday, Aug. 11 workshop, with a built-in requirement that the deal produce at least $500,000 in gross savings.
The vote greenlights Stafford Municipal School District Unlimited Tax Refunding Bonds, Series 2026, which will refinance a portion of the district's outstanding debt at lower interest rates. The bonds are scheduled to close Sept. 15, with the Mayor of Stafford and Superintendent Adam Stephens designated as "Pricing Officers" who can finalize sale terms within one year of the ordinance.
The $500,000 gross savings floor is written directly into the ordinance as a condition of issuance. If the refinancing cannot hit that threshold, the bonds cannot be sold.
Marcus Deitz, a Houston partner at bond counsel firm Orrick, Herrington & Sutcliffe, authored a July 24 memo to City Secretary Roxanne Benitez recommending the ordinance language and served as bond counsel for the transaction. RBC Capital Markets is serving as financial advisor and underwriter, with The Bank of New York Mellon Trust Company in Dallas acting as escrow agent and registrar.
According to the meeting's agenda packet, the bonds are authorized under Chapter 1207 of the Texas Government Code, which allows the city to issue refunding bonds on behalf of SMSD.
How Stafford's tax structure works
Stafford is the only city in Texas that operates a municipal school district. The city itself levies no property tax for its own operations. Under Texas Education Code §11.303, the City Council and SMSD Board jointly levy ad valorem taxes, but only for the school district's benefit.
SMSD's 2025 total property tax rate stood at $1.002121 per $100 valuation, split between $0.786900 for maintenance and operations and $0.215221 for debt service, according to Fort Bend County tax records. The refunding bonds could reduce the debt-service portion of that rate over time.
CFO Dovran Ovezov also presented the 2026-2027 SMSD budget and tax rates at the same workshop, though details of that presentation were not included in the published agenda packet.
Background
The action follows a similar joint vote in August 2025, when both bodies authorized the defeasance and redemption of up to $3.53 million in outstanding Series 2016B bonds by Aug. 31, 2026. That was a cash-funded payoff of older debt. The new Series 2026 bonds are a market refinancing of a separate tranche.
As of Aug. 31, 2022, SMSD carried approximately $99.2 million in long-term general obligation bonds across seven series. Voters also approved a separate $150 million bond package in 2025 for capital improvements, divided into Propositions A through D.
The bond closing is set for Sept. 15. No additional public vote is required before that date.
