San Marcos staff outline $67.6 million anticipated debt sale to fund FY2025 CIP projects

Sean Condor, director of engineering and capital improvements for San Marcos City, told the council that the presentation was intended to “brief you on updates to the fiscal year 2025 capital improvements program” and to prepare council for an upcoming debt issuance.

The presentation said the council had approved roughly $85 million in new FY2025 CIP projects and about $40 million from prior-year projects that remained unfunded, for a combined total of about $125 million in projects still awaiting funding. Of that amount, staff proposed deferring approximately $34 million, funding about $20 million with cash or reserves, applying about $700,000 in impact fees, cancelling roughly $2.6 million, and issuing approximately $67,605,000 in debt to cover the remainder. Condor gave a fund-by-fund breakdown, saying the planned issuance would be allocated roughly as follows: General Fund projects about $15 million; stormwater (which this year is 100% supported by General Fund per prior council direction) just under $18 million; electric about $4.1 million; and water/wastewater about $30.45 million.

Condor described the CIP as a multi-year planning tool that links project identification to budget timing. “It’s a long time from the time we first start talking about [a] project to when we fund it. It’s about 18 months,” he said, explaining that project scoping and funding decisions made in one year can affect budgets two years later. He reviewed the typical schedule staff will follow: a council resolution to publish notice of intent to issue certificates of obligation is planned for the Feb. 18 meeting; public notices and rating-agency work would follow in March; ratings are expected in early April; bids would be received mid-April; an ordinance authorizing issuance would return to council in mid-April; and funds would be available in May.

Condor and staff walked through project-level examples on the proposed debt list. Examples included: an activity center with $600,000 of proposed debt funding; airport-related projects where staff are matching federal or TxDOT grants and canceling a $1.5 million land-purchase line pending federal appraisal negotiations; a $1 million allowance for a fire training facility and related training and apparatus funding; and a $20 million allocation toward construction work for a second wastewater treatment plant with $10 million deferred. Condor also said some projects shown as deferred reflect timing or developer participation rather than cancellation.

Council members asked about term lengths and the life expectancy of assets being financed. Condor said the city typically issues 20-year debt for CIP projects and that items with shorter useful lives are prioritized for cash funding or short-term notes; he noted, for example, the city plans a shorter, seven-year note for a fire engine rather than a 20-year issuance. Council members also asked about the CIP book and the interactive project map; staff said the full project sheets remain in the CIP book and an interactive map can return single-project detail by project number.

Staff did not seek a funding ordinance at this meeting; the presentation was informational and preparatory. Condor said the finance team will present more detail at the next council meeting and that final debt terms will be set at closing after bids are received in April.

Ending

City staff provided the CIP packet and an interactive map link and paused for council questions. Councilmembers and staff agreed to return on the previously announced schedule for formal publication notices, rating work and eventual council action on authorization to issue debt.