The New Braunfels City Council on July 14 approved an ordinance authorizing the issuance of up to $62,650,000 in general obligation and refunding bonds to finance projects from the city’s 2023 bond program and to refund certain older debt. Council member Ryan moved approval and Council member Lebowski seconded; the measure passed on a roll-call vote with Capizzi, Spradling, Lebowski, Ryan and Mayor Leonard voting aye and two members absent.

City staff described the package as two parts: a $40 million “new‑money” issuance to support the 2023 bond program (propositions A, B and C: streets, parks and library) and up to $22.65 million intended to refund prior general obligation and certificate of obligation issues. “Those will be refunded if they can come with a minimum savings of 3%, which would estimate to be about $75,000 annual savings,” a city staff member said in the council meeting.

The ordinance authorizes a parameter sale, which sets limits and delegates final pricing to designated officials. Under the ordinance, the city manager and the director of finance (as pricing officers) may finalize the sale within the parameters listed in the bond ordinance; if the refunding parameters (including the 3% minimum savings threshold) are not met at pricing, the city may issue the new-money portion and defer the refunding for up to 12 months.

City staff said the $40 million new-money issuance is the next planned tranche of the 2023 bond program, following prior issuances in fiscal 2023. The refunding authority covers 2014 general obligation bonds, 2015 certificates of obligation and 2015–2016 general obligation issues; refunds will proceed only if the pricing meets the ordinance’s minimum savings test.

No members of the public spoke on the item during the council hearing. The approved ordinance also authorizes execution of related documents commonly used in municipal bond sales, including a paying agent/registrar agreement, an official statement, a purchase agreement and an escrow agreement as needed.

Background: Parameter sales allow the issuer to set ceilings for interest rates, maturities and par amounts and to delegate final pricing within those ceilings to authorized city officials. The council held a public hearing and then took the final vote on the ordinance on July 14.