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Hidalgo County drainage district moves forward with financial plan to sell next phase of 2023 bonds
Summary
District financial advisers briefed directors on outstanding debt and the possibility of issuing approximately $45 million of new bonds as a second phase of the 2023 bond program; the board authorized the district’s financial adviser to prepare a financial plan for the sale.
Hidalgo County Drainage District directors on June 24 heard a presentation from the district’s financial adviser and agreed to proceed with preparations for a sale of bonds to fund the next phase of the 2023 bond program.
Bobby Villareal, with Estrada (financial adviser), told the board the district has roughly $249,000,000 of outstanding debt. “I think roughly you you have about 200,000,000 I mean, I'm sorry, 249,000,000 outstanding,” Villareal said during his presentation.
Villareal and staff walked directors through options for refunding portions of older issues with limited remaining life and identified about $45,000,000 in new-money borrowing (the presentation showed $45 million in the “green” column) as a likely next sale. The presentation noted the district previously sold roughly $60,000,000 of the 2023 voter-approved bonds and that the district has capacity to issue additional debt without raising the current interest-and-sinking (I&S) tax rate above the levels projected for 2026–27.
Raul (General Manager) and Villareal discussed financing structure options, including taxable versus tax-exempt issuance and the potential inclusion of a Water Development Board (FWDB/FIF) loan that Villareal said could be approximately $33,000,000 and historically carried favorable (in some cases 0%) terms. Villareal said use of taxable bonds has allowed the district flexibility to avoid three-year expenditure restrictions tied to tax-exempt proceeds when engineering and permitting take longer to expend bond proceeds.
After the briefing, the board approved a motion to authorize the district financial adviser, Senator Hoss and Company (transcript reference), to prepare a financial plan for the bond sale for the second phase of the 2023 bond program.
Why it matters: The district’s decision to move forward with planning for new bond sales will fund continued construction and development of drainage projects approved by voters in 2023. Structure and timing decisions (taxable v. tax-exempt, refunding older issues, possible Water Development Board loan) affect debt service, tax-rate management and project scheduling.
Next steps: staff and the financial adviser will develop a sale plan and return to the board with recommended timing and structure for the bond sale; the presentation noted pricing was expected to be considered in late summer.
