Taylor council begins notice process for up to $15 million in certificates of obligation

Taylor City Council on April 24, 2025 adopted Resolution R25-08 to begin the statutory notice process for issuing combination tax and revenue certificates of obligation in an amount not to exceed $15,000,000.

The move starts a 45-day publication period required by state law before the council may finalize any borrowing; during that period residents may petition to require voter approval. The resolution sets a not-to-exceed cap and does not itself obligate the city to borrow the full amount.

Why this matters: the city staff said the proposed issuance would fund a mix of tax-supported capital projects and utility projects identified in the city's capital improvement planning, and staff emphasized the action tonight simply begins the process so council and the public can review project priorities before any sale.

Staff presentation and numbers Mr. Powers, a city staff member, summarized prior work the council received in October and January and said the resolution's not-to-exceed amount is intended to give staff and advisers flexibility while market conditions and project priorities are finalized. He said the draft resolution sets a $15,000,000 cap, and staff's current project identification includes roughly $8,000,000 for tax-supported (nonutility) projects and roughly $5,000,000 for utility projects. "State law requires that, before a city issues certificates of obligation, you have to publish notice in the paper and give the public 45 days notice ahead of the council action," Mr. Powers said. He also told the council the financing plan is being prepared under the guideline that "it will not cause a tax rate increase."

Mr. Powers also described the city's preliminary taxable values from the appraisal district and said the city's taxable base (excluding two TIFs) had increased about 17 percent from the prior year, which affects capacity and options around debt and tax rate calculations. He noted the utility-rate adjustments adopted last year were sized to accommodate additional utility debt service and said any utility debt would be paid from water and sewer rates.

Council questions and alternatives Council members pressed staff on options and trade-offs. One council member asked whether approving the resolution could result in issuing $0; Mr. Powers confirmed the process could end without borrowing. Another asked whether the cap could be lower; several council members discussed an alternative of "paying cash" for some projects instead of borrowing. Councilmember Anderson urged using available cash reserves to reduce borrowing; he suggested reducing the city's cash balance from the current level toward policy targets and using excess cash to avoid debt. Mr. Powers cautioned that debt service on a hypothetical $10,000,000 tax-supported issuance would be roughly $800,000 annually—"about one and a half cents on our tax base"—and that choices about borrowing or cash funding would affect the tax-rate calculation and the general fund.

Motion and next steps Mayor Pro Tem Samaritan moved to approve Resolution R25-08; Councilwoman Cobb seconded. The council voted to adopt the resolution (tally recorded in the meeting as four in favor; one council member was not recorded on the floor for the vote). Adoption of R25-08 starts the required public-notice period and authorizes staff and the city's financial adviser and bond counsel to proceed with preparations. Jennifer Ritter (financial adviser) and Bart Fowler (bond counsel) were present in the meeting but did not present.

No projects were authorized or funded tonight. Staff told the council additional meetings over the coming weeks and months will present a prioritized list of specific projects and final recommendations for any sale, and the next council (post-election) will have the opportunity to refine or reverse the financing plan.

Ending The resolution begins a statutory process but does not obligate the city to borrow. Council members said they expected further discussion of which projects to include and whether to reduce borrowing by cash funding some work; a final decision on project selection and the amount to issue will come at later meetings if the city proceeds.