Three months after one of the closest bond elections in Texas history and double reversal of results, a $569 million Midland Independent School District bond proposal has officially failed by 26 votes.
Judge Mackey K. Hancock, assigned by the Texas Supreme Court to decide the matter, has signed and delivered the final results.
“This certainly seems like an atypical fact pattern for a Texas school district,” said Douglas Benton, senior municipal credit manager for Cavanal Hill and a longtime expert on the Texas bond market.
The day after the Nov. 5 election, the bond proposal appeared to pass by 18 votes. But a week later, election officials in the West Texas school district reported that the vote count did not include mail-in ballots. With those votes counted, the issue appeared to fail by 25 votes, according to Deborah Land, elections administrator for the Midland County Elections Office.
A group of bond backers called “We Choose Our Future” called for a recount that reversed the results to passage by 11 votes. The recount was signed by County Judge Terry Johnson on Nov. 15.
Then, in early December, county officials found a missing ballot box that contained 836 votes and another stray vote that had been misplaced. The ballot box was found in a storage room in a county building.
The Office of the Texas Secretary of State was contacted and advised Midland County officials of how to reopen the vote count.
Texas Supreme Court Chief Justice Nathan L. Hecht named Hancock to oversee the second recount on Dec. 23.
In January, Hancock ordered the intervenors’ attorney Joe Nixon, representing both the opponents and proponents of the bonds, to get depositions from Midland County Elections Office employees to determine if these votes are legal and could be counted.
On January 6 at 9 a.m., all parties gathered at the Midland County Commissioners Courtroom at the Midland County Annex to recount the secured ballots manually.
The Midland ISD bond proposal was the largest defeat among the record $16 billion of bond proposals on ballots around Texas in the Nov. 5 election. More than $14.5 billion won voters' authorization.
The narrow defeat in the heart of the economically booming Permian Basin came even with the backing of the region’s oil industry and Midland Chamber of Commerce.
Supporters of the bond and members of the Midland ISD board have said they want to return to the ballot this year.
With net outstanding debt of about $208 million, the school district, one of the largest in the state, carries underlying ratings of Aa2 from Moody’s Investors Service, enhanced to Aaa with the wrap of the Texas Permanent School Fund.
“Midland ISD has a light debt burden and is slightly favorable with respect to the assigned rating of Aa2,” Moody’s noted. “The district's net direct debt to full value (1%) is under the US median, and decreased between 2014 and 2018. On the contrary, the pension liability of the district is low and is slightly weak when compared to its Aa2 rating.”
