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Rowlett council approves parameter ordinance to seek up to $20 million in certificates of obligation
Summary
The Rowlett City Council unanimously adopted a parameter ordinance authorizing up to $20 million in certificates of obligation to help finance a municipal complex, delegating final pricing authority within set limits including a 5.5% true interest cost cap and a 30-year maturity.
The Rowlett City Council on Dec. 3 adopted a parameter ordinance allowing the city to issue up to $20,000,000 in certificates of obligation to help fund a planned municipal complex that would include a new city hall, administrative offices, police and fire headquarters, jail, courts, an animal shelter and park amenities.
Finance Director Wendy Badgett summarized the plan, saying the proposed issuance would "supplement the $7,600,000 funding received from the general obligation bonds" issued in August 2023 as part of an overall $76,000,000 debt funding plan. She told the council the ordinance sets a maximum true interest cost of 5.5%, a $20,000,000 principal cap and a final maturity date of Feb. 15, 2055, and would delegate final pricing authority to the city manager and/or finance director for a limited time period.
The council heard no technical questions after the presentation. Councilmember Shoop moved to adopt the ordinance; another member seconded. In explaining support, one council member said, "I don't think it's ever bad to admit when you're wrong," describing a prior personal opposition to certificates of obligation and saying the city's debt strategy discussions and fiscal stewardship led to a change of view. The motion carried unanimously by those members present.
Why it matters: Certificates of obligation allow the city to lock in financing outside the confines of a regularly scheduled council meeting, giving staff flexibility on timing; the funds are intended for capital components of the municipal complex project. The ordinance delegates limited pricing authority and sets financing guardrails intended to limit interest costs and principal size.
Next steps: If approved, staff indicated pricing is anticipated in late February 2025 with closing to follow in March 2025, subject to the parameters approved by the council. The council did not specify additional conditions beyond the parameters presented.
