Granbury council directs city manager to pursue $20M bond, favors 10‑year option to fix streets

The Granbury City Council on the motion of a council member voted unanimously to direct the city manager to pursue a $20 million bond using a 10‑year structure to fund phase 1 of the city’s street capital improvement plan.

City Manager Kaufman told the council staff were seeking direction, not final approval, and that if the council chose a path staff would return a formal resolution at the next meeting. “There’s not any grant funds available for road repair or road construction,” Kaufman said, and staff presented two financing options tied to a $20,000,000 bond issuance and packet worksheets showing comparable scenarios.

The council and staff reviewed projections in the packet showing the current interest and sinking (I&S) tax rate at 17.3¢. Kaufman said the packet shows the I&S rate would rise to about 19.67¢ under a 20‑year issuance and that staff’s comparative analysis makes the 10‑year option more advantageous because of a larger bond premium and lower total interest. He summarized the 10‑year scenario as roughly $23,000,000 in total debt service with approximately $20,000,000 in proceeds and a net borrowed amount near $18.8 million after premium.

Ava Gregory, who said staff had just received preliminary appraised values from the appraisal district, told the council valuations are up about 6% and that roughly $80,000,000 in new construction value was added in the most recent update. “At this point, we just received our preliminary values… we are seeing a 6% increase,” Gregory said, and she offered to share the spreadsheet that supports staff’s estimates.

One council member summarized the taxpayer impact using a $300,000 example, estimating the 10‑year option might cost that homeowner roughly $7.50 more per month while producing an overall savings of several million dollars compared with a 20‑year issue; that member said they believed residents would accept the increase and moved to pursue the 10‑year plan. Another member asked whether staff had modeled effects going into the next budget cycle; staff said assumptions were preliminary and that holding the M&O (maintenance & operations) rate steady would imply an estimated ~5¢ increase on the I&S side under the current projections.

Staff and council also discussed bond-market technicals: Kaufman said staff used a conservative 5% assumed sale interest rate for planning, but the actual rate could be lower; Gregory and Kaufman pointed to the packet’s true interest cost (TIC) and coupon figures (examples shown: 3.03% vs 3.77% as different cost measures) to explain overall borrowing cost and the effect of premiums.

In a voice vote, the council approved a motion directing Kaufman to pursue the 10‑year bond structure; the motion was made by a council member and seconded by another and was recorded as passing 5‑0. Kaufman said the city’s financial adviser will return at the next council meeting with a proposed resolution and a more detailed walk‑through of the financing timeline and terms.

The council’s action is procedural direction to staff; formal borrowing would require further steps including public notices, the bond-sale process and final council approval of a resolution. Staff said they will monitor the appraisal district updates and return refined figures when the financial adviser presents next.