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Highland Village approves $7.08 million certificates of obligation after competitive bid
Summary
The Highland Village City Council voted unanimously to adopt an ordinance authorizing the issuance of combination tax and revenue certificates of obligation to fund two street reconstruction projects after receiving competitive bids that produced a 4.01% true interest cost.
The Highland Village City Council on Sept. 9 voted unanimously to adopt an ordinance authorizing the issuance and sale of combination tax and revenue certificates of obligation totaling roughly $7,075,000 to fund reconstruction of Highland Shores Boulevard and Highland Village Road.
City staff presented results from a public competitive bid that produced a true interest cost of 4.01% for the 20-year, fixed-rate certificates. Amber Chen of Hilltop Securities, the city's financing adviser, told the council the city retained its AAA rating from Standard & Poor's and that the low bid came from Raymond James. Chen said the total principal-plus-interest over 20 years is roughly $11.3 million, which she translated to an average annual payment of about $586,000.
The presentation noted a principal/issue-value figure of $4,130,000 and an overall issuance amount of approximately $7,075,000 toward the two street projects; Chen also said the final numbers were materially better than the numbers the council budgeted earlier in the year. "The city was again affirmed with credit rating AAA by Standard and Poor's," Chen said. "We recommend going with the lowest interest cost, which comes from Raymond James." Andre Ayala, described in the meeting as the city's financial advisor, attended and was available for questions.
The ordinance (listed in the meeting as Ordinance 2025-13-29) was moved and seconded on the floor and carried on a 7-0 voice vote. The council was told, if adopted, the closing and funding would occur on Sept. 25.
Why it matters: the certificates will provide near-term funding for two roadway reconstruction projects that were previously discussed during the budget process. The fixed-rate debt and the city's AAA rating were presented as factors that reduced debt service costs below what staff had budgeted earlier this year.
Council action and next steps: the council approved the ordinance authorizing issuance of the certificates on a unanimous vote. Staff said the city will proceed to closing on Sept. 25 and then apply the proceeds toward the two street projects identified in the package.
