Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Capital Improvement topic
No spam. Unsubscribe anytime.
Brownsville staff urges selling $150 million in debt now to fast-track public safety complex amid state cap threat
Summary
City staff recommended selling $150 million immediately to secure grant matches and build priority projects — notably a new public safety complex — if proposed state legislation caps certificates of obligation, a move commissioners were asked to consider alongside a smaller, riskier alternative.
City financial staff on Tuesday told the Brownsville City Commission that a proposed state law to cap certificates of obligation would sharply reduce the city’s annual ability to issue debt and complicate its five-year capital improvement program.
Alan Guard, deputy city manager and chief financial officer, said the bill under consideration would limit certificate sales to about 20% of prior-year property tax revenue. “So whereas our previous plan … we would sell between 40 and $50,000,000 a year each of the next five years,” Guard said, “this would now restrict us to about 15,000,000 a year.” He added: “What our recommendation is is that we sell $150,000,000 now of debt and get all the cash that we need now upfront so we can build the high priority projects.”
Guard described two scenarios. Under scenario A, the city would proceed under the existing issuance plan and sell roughly $45–50 million annually; under scenario B, staff would accelerate borrowing and sell $150 million now to lock in funds for high-priority projects, matches for roughly $65–70 million in grant awards, and to avoid multiyear delays driven by rising construction costs. He said roughly $70 million of that $150 million would be earmarked for the public safety facility.
Staff explained which projects would be accelerated or deferred under scenario B: phase 1 of Coffeeport Road and Old Alice would be prioritized; sidewalk and alley gap funding would increase; Dennett Road could be moved into an earlier construction year as a complete-street project; station-1 and station-2 fire station replacements would likely be pushed past FY2029 in the constrained scenario. Guard also noted recent TxDOT awards of nearly $28 million in projects that require the city’s match and are time-sensitive.
Commissioners asked about timing, interest-rate exposure and the mechanics of a large bond or certificate sale. Guard said financing through a construction manager at risk and negotiated guarantees would allow contract not-to-exceed language to limit price risk during bidding. He noted Moody’s had affirmed the city’s AA3 stable rating, saying the city’s fiscal position supports the strategy.
No final borrowing action was taken during the work session; staff said they would schedule a special workshop to present more detailed project schedules and street-by-street prioritization.
Next steps: staff will bring detailed scenarios, updated schedules and recommended ordinances to a special work session in the coming week.
