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Finance working group outlines fall bond and loan plan, including TWDB SWIFT loans and United special-facility bonds
Summary
City finance staff briefed the Budget and Fiscal Affairs Committee on July 29 about planned fall financings, including $150'00 million in general-obligation public improvement bonds, the annual TRAN sale, TWDB multi-year loans for water projects and airport special-facility financings tied to United Airlines.
City finance staff briefed the Budget and Fiscal Affairs Committee on July 29 about multiple upcoming financings they plan to present to council this fall.
General obligation bonds: staff said the city typically converts commercial paper into long-term public improvement bonds and expects a public improvement bond issuance in the $150 million to $200 million range to fund CIP projects for general-fund departments. The office said pricing is likely in September with a probable closing in October and estimated an all-in true interest cost near 4.75 percent on a 20-year amortization schedule.
TRAN (Tax and Revenue Anticipation Notes): staff said the annual TRAN sale bridges cash-flow seasonality between even-year taxing receipts and year-round expenditures. The finance working group expects to bring an RCA to council in August to authorize a competitive sale, with pricing to occur in October.
Combined Utility System and TWDB loans: the city applied to the Texas Water Development Board (TWDB) for multi-year loans supporting the East Water Purification Plant (SWIFT program) and related Coastal Water Authority pipeline work. Staff said an initial $350 million issuance (of a total $966 million application) may be recommended for council action in August, with an estimated true interest cost around 4.75 percent. The Coastal Water Authority application was approved previously; the second annual installment for the B-2 pipeline is $50 million and expected to close this fall. The finance team also described two Clean Water TWDB loans of $44 million each anticipated for lift-station renewal and rehabilitation, with actions expected across 2026.
Airport and United special facilities: staff described refunding candidates for special-facility revenue bonds tied to United Airlines and a plan to finance new United ground-support facilities (a catering operations facility and a ground-support-equipment facility) with special-facility revenue bonds supported by United lease payments, not by general airport revenues. Staff estimated refunding roughly $425 million of outstanding special-facility debt could yield about $14.7 million in savings (approximately a 3.4 percent present-value savings) and indicated a separate special-facility issuance of roughly $400 million to finance the United facilities. The finance team said it aims to coordinate refunding and the special-facility issuance in a fall market transaction.
Next steps: multiple items will return to council for authorization and pricing in the coming weeks; staff emphasized that TWDB loans, refundings and special-facility financings require subsequent council approvals and, where applicable, state agency concurrence.
No formal council action occurred in the committee; staff described timelines and estimated borrowing costs for council consideration.
