County financial advisers outline bond capacity and timelines; staff to hold capital planning workshop

El Paso County’s financial advisers presented a market update and debt-capacity scenarios on Jan. 13, outlining options for funding capital projects with a mix of tax notes, certificates of obligation and voter-authorized general-obligation bonds.

Brad Angst of Stifel Public Finance told the court municipal market interest rates have risen modestly since September but remain near long-run averages. He said rising jobs data and Federal Reserve messaging have reduced investor expectations for multiple rate cuts this year, which pushed some yields up 25–40 basis points since last fall.

Why it matters: The county is considering how to stage capital spending approved by voters and how to finance projects in the 5¢ "essential purpose" tax fund while maintaining capacity for future issuances. The court will need to align project schedules, grant applications and Texas Comptroller/CAD deadlines to avoid unused proceeds and to maximize savings.

Key numbers and options presented

- 5¢ essential-purpose fund: advisers estimated borrowing capacity of approximately $135–$175 million over the next three years, with ongoing capacity thereafter of roughly $70 million every two years depending on financing choices. - Tax-note option: the county could issue up to a $35 million tax note now while preserving future capacity; tax notes must be repaid within seven years and can reduce long-term interest costs relative to long amortizations. - Taxable component: adding a 20% taxable portion to a $35 million tax note would raise total borrowing costs by about $1.3 million, advisers said. - Longer-term plan: advisers outlined a possible sequencing that included an initial issuance of roughly $40 million (to fund early design and construction phases) and a larger voter-authorized general-obligation issuance later (illustrative example included $115 million in 2027), depending on project readiness and CAD valuation timing. - Grant applications: staff reported five active applications to the Texas Water Development Board with an estimated loan request near $66 million if all awards are granted; timing of those awards could affect the county’s financing schedule.

Timeline and next steps

Advisers and staff recommended a capital planning workshop (scheduled for Jan. 30) to finalize project priorities, repayment terms and delivery methods. Key administrative dates noted include late April for preliminary CAD valuation information, a potential late-April authorization for issuance (if the court chooses to move forward), and a pricing/bond sale targeted for early June in order to meet appraisal and tax-collection timelines.

Speakers (as identified in the meeting)

- Brad Angst, Stifel Public Finance (financial adviser) - Jose Del Nelos, Strategic Capital Development (county capital advisor) - County staff from planning, budget and public works (participating in Q&A)

No formal vote was taken on financing at the Jan. 13 meeting. Commissioners asked staff to return with refined project lists and to coordinate grant-award timing before any authorization to issue debt.

Clarifying details

- "Capacity range": $135–$175 million across three years based on the county’s 5¢ INS tax rate and current valuation projections; range depends on debt product and amortization length. - "Tax-note maximum": $35 million is the estimated maximum tax-note issuance this spring that preserves future borrowing flexibility. - "Recurring capacity": advisers estimated about $70 million available on an ongoing basis every two years after the initial sequence, subject to valuation growth and repayment structure.

Proper names

[{"name":"Stifel Public Finance","type":"business"},{"name":"Texas Water Development Board","type":"agency"},{"name":"Strategic Capital Development","type":"business"}]

Meeting context

- engagement_level: {"speakers_count":6,"duration_minutes":90,"items_count":1} - implementation_risk: "medium" - history: [{"date":"2024-11-01","note":"Voter-authorized GO bonds approved in prior election; county developing issuance plan."}]

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