Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
San Angelo council approves $20 million certificates of obligation for street program
Summary
The City of San Angelo approved an ordinance delegating pricing authority for approximately $20 million in combination tax and revenue certificates of obligation to fund the City Streets program; staff projected interest near 4% and said the issuance will not raise the debt service tax rate.
The San Angelo City Council on Oct. 15 approved an ordinance delegating pricing authority for the issuance and sale of approximately $20,000,000 in combination tax and revenue certificates of obligation, Series 2024, to fund the city streets program.
City staff said the certificates will be amortized over 20 years and that the financing is structured so the debt service tax rate will not increase. Tina (staff) told the council the original financing model from Specialized Public Finance projected about 4.92% when the item was first discussed over the summer, and staff now expects an interest rate closer to 4% when bids are received; staff said bids will be opened Thursday at 9 a.m. and the transaction is expected to close Nov. 14.
During public comment, Jamal Shumpert (Single Member District 3) raised questions about the legal and fiscal consequences of default, asking whether a default could result in a private water system obligation; Mayor Brenda Gunter responded that the city’s AAA credit rating and conservative planning allow access to favorable interest rates and that the city builds debt service coverage into its budgets. “One of the reasons we can come in with the interest rate she’s talking about is because we have a history of paying our bills on time,” Mayor Gunter said.
Councilmember Tommy moved approval, with a second from Councilmember Harry; the motion passed by voice vote.
Next steps: staff will accept bids as scheduled and return the award per the ordinance’s delegated authority before closing the transaction in November.
