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Council authorizes certificates of obligation and TWDB loan structure to fund capital projects
Summary
La Marque authorized the issuance of tax‑and‑subordinate‑lien revenue certificates of obligation and accepted a Texas Water Development Board (TWDB) loan structure offering subsidized rates; staff said TWDB terms will save roughly $2 million in debt service compared with public market financing.
The La Marque City Council voted May 12 to authorize sale of tax-and-subordinate-lien revenue certificates of obligation tied to a Texas Water Development Board loan package to fund planned water, sewer and wastewater system projects.
Finance advisers and bond counsel briefed council on the TWDB structure and rates. Staff said the loan will be a 20-year obligation with an all-in interest cost of about 2.46 percent under the TWDB term sheet and an estimated total debt service of roughly $12.68 million. Council advisers said a comparable public-markets financing would likely run nearer 4.18 percent and produce an estimated $14.7 million in total debt service — a roughly $2 million saving from the subsidized TWDB package.
Why it matters: the TWDB program is a common financing path for municipal water and sewer improvements. Council and advisers said the plan uses water-system revenues to repay the loan and does not expect to require a property-tax pledge; staff and municipal advisers confirmed system revenues had sufficient net excess to support the debt service in the near term.
Council discussion: advisers and bond counsel walked the council through the final terms and the requirement that the council adopt an ordinance authorizing issuance and execution of paying-agent, escrow and other financing documents. Some council members reiterated a policy preference to limit debt issuance where possible; others noted the financial savings from the TWDB terms and moved to proceed. The ordinance passed by council vote 3-1 (one member recorded opposition under the city’s expressed fiscal views) and staff will complete final closing steps with bond counsel and the TWDB.
Next steps: staff and bond counsel will complete required legal documents, finalize the sale and return any required closing documents to council. The city will execute the loan closing and begin project disbursements consistent with TWDB and city procurement rules.
Ending: Council approved an ordinance to authorize the certificates and directed staff to proceed with closing and documentation under bond-counsel guidance.
