Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance Debt topic
No spam. Unsubscribe anytime.
Whitehouse council approves notice to issue up to $15.5 million in certificates of obligation
Summary
Council approved a notice of intent to issue combination tax and revenue certificates of obligation to fund capital projects — including a new fire station demolition/rebuild and city hall renovation — while holding the debt-service tax rate steady at 29 cents per $100 of valuation in the model.
The Whitehouse City Council on May 27 voted to publish a notice of intent to issue certificates of obligation for up to $15.5 million to fund priority capital projects identified in the city’s capital-improvements program.
City financial advisers told the council the plan was structured to keep the city’s debt-service tax at roughly 29 cents per $100 of taxable value by using existing debt-service reserves and conservative growth projections. The notice starts a legal publication and waiting period; the council will return July 22 to set final pricing.
Paul Jason of Specialized Public Finance, the city’s financial adviser, told the council the proposal would fund projects at the top of the 2022 capital-improvement list, including demolition and rebuilding of a fire station and an expansion and renovation of city hall, and related park improvements. Jason said staff modeled a $15 million issue (the notice uses a $15.5 million “not-to-exceed” cap to allow flexibility in the competitive bidding process) using a 5% annual tax-base growth assumption through 2033 and 3% thereafter and an assumed bond rate of about 4.77% as a conservative estimate.
Jason said the city’s debt-service fund balance currently totals roughly $1.7 million; the plan would use about $1.1 million of those reserves over the next three years to keep the debt-service tax rate steady while adding the new debt. He also explained a timeline: notice publication would start June 6, the council would set rates July 22, and the city would aim to close the financing by Aug. 21 so the debt issuance would precede potential legislative changes effective Sept. 1 that could limit municipal debt tools.
Councilmembers asked about risks of accelerating the issuance. Staff and the adviser said the principal risks are project-management bandwidth and the requirement to spend proceeds within three years for tax-exempt debt; they also said changes in state law could make future debt issuance more difficult, which was a reason to move now. The council’s resolution directs publication of the notice of intent and sets the issuance process in motion; no bond sale was finalized at the meeting.
Miss Black, city staff, recommended approval; the motion carried unanimously on a roll-call vote.
