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Southlake approves $13.6 million certificates-of-obligation issuance to fund infrastructure

Southlake City Council · April 21, 2026

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Summary

Council approved an ordinance authorizing sale of tax and water/sewer system revenue certificates of obligation; a competitive sale produced roughly $13.6 million in gross proceeds, with approximately $13.49M in project funds and an S&P AAA confirmation. Vote: 7–0.

The Southlake City Council on April 21 approved Ordinance No. 1299 authorizing issuance of tax and water/wastewater system revenue certificates of obligation to fund general infrastructure and stormwater projects.

Jim (James) Sabonis, managing director at Hilltop Securities and the city’s financial adviser, summarized the competitive sale held earlier the day of the meeting. He said the sale produced ten bids, with the low bid at 2.957622 percent. The offering included a par issuance of $12,025,000 and a premium of $1,623,000, producing gross proceeds of about $13,600,000 and leaving approximately $13,490,000 available in the project fund after issuance costs. Sabonis said the transaction is roughly 20 basis points lower than initial expectations — saving the city an estimated $202,000 in interest expense — and that S&P affirmed Southlake’s AAA rating with a stable outlook.

City finance staff said the general infrastructure portion will be amortized over 10 years and the stormwater portion over 15 years; stormwater infrastructure will be funded by utility net revenues and the other projects by I&S ad valorem tax levy and system revenues as appropriate. Sabonis and the finance director said the transaction should not affect the current I&S tax rate assuming no change in taxable value.

No members of the public spoke at the hearing. Mayor Pro Tem Randy Williamson moved approval and the council voted 7–0 to adopt the ordinance authorizing the sale. Bond counsel will submit the order to the Texas Attorney General for review and the city expects to close the transaction and receive funding on May 20, 2026.