County authorizes staff to pursue up to $30 million certificates of obligation ahead of possible state limits

McLennan County commissioners on May 6 authorized county staff and the county’s financial adviser to proceed with planning for a certificate of obligation financing, potentially not to exceed $30 million, to fund a range of capital projects and to protect the county’s flexibility if state law changes.

Mark McClainey of Samco Capital Markets reviewed the rationale and timeline with the court. He said the Texas Legislature is considering House Bill 19, which could restrict local governments’ ability to use certificates of obligation, and recommended a defensive financing timetable. The calendar presented included a notice of intent resolution at the court’s May 20 meeting, a sale around July 15, and closing in early August so proceeds would be secured before an Aug. 31 statutory effective date or similar change. "This sets us up to borrow and meet a timeline to proceed," McClainey told the court.

The financing plan explained how rolling a new issue into the county’s existing debt structure could allow needed projects without increasing the county’s interest and sinking (I&S) tax rate in the near term. McClainey and county staff emphasized that the proposed notice would use a “not to exceed” amount and broad project language so the court could prioritize projects or scale the issuance depending on market conditions.

The court discussed market‑rate volatility and timing risks; McClainey said interest rates had fluctuated recently and that the county could delay a sale into August if market conditions warranted, but noted the need to close by Aug. 31 if legislative changes take effect. Commissioners voted to authorize staff and the financial adviser to proceed with the future issuance; the court directed staff to prepare a notice‑of‑intent resolution for the May 20 meeting if the court wants to proceed.