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San Marcos sells $88M in bonds, affirms AA ratings to fund CIP and wastewater plant
Summary
Council approved sale of certificates of obligation and water/wastewater revenue bonds for FY26 capital projects, including a new wastewater treatment plant. Rating agencies affirmed an AA credit; competitive bids produced favorable rates and multi‑bank participation.
San Marcos secured funding for capital projects and a new wastewater treatment plant after council approved bond authorizations and accepted competitive bids at the April 21 meeting. Financial advisers and bond counsel reported an AA rating on both the general obligation/certificate of obligation issue and the water/wastewater revenue bonds, reflecting the city’s fiscal practices and planning.
Key outcomes: A tax‑supported certificate of obligation (resized in the market) produced sufficient proceeds for the FY26 CIP; the council approved an ordinance delegating pricing authority and accepted the winning bids at competitive rates. The larger water/wastewater issuance — aiming to raise funds for the new wastewater treatment plant and associated infrastructure — was bid competitively (13 bids) and produced a recommended award with an effective interest rate in the 3.87% range. The Texas Water Development Board will additionally provide low‑cost financing and principal forgiveness for portions of a reclaimed‑water and force‑main project (loan plus forgiveness totaling approximately $13.7M).
Why it matters: The bond sales lock in financing for planned infrastructure projects in the CIP and enable the city to move forward on a major wastewater plant replacement/upgrade. Council approved delegation language to allow staff to set final pricing within defined parameters.
Next steps: Staff and bond counsel will finalize sale documents and closing details; council will receive reports when sales are completed.
