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Cibolo council delays $4.5M certificates of obligation sale pending certified values, asks for CIP detail
Summary
Council debated issuing up to $4.5 million in certificates of obligation to fund FY26 capital projects and frontline equipment. Members raised concerns about frontloading debt, preserving operating capacity for staffing, and asked staff to delay the sale until certified property values are available (July 25) and to return with CIP project life spans and equipment justifications.
CIBOLO — On June 9 the Cibolo City Council pushed back a planned July bond sale and asked staff to return with refined numbers after certified property values are available, rather than proceed immediately with up to $4.5 million in certificates of obligation for FY26 capital needs.
Finance staff had recommended issuing the full $4.5 million to fund a list of one‑time items in the FY26 CIP — including road design, pavement equipment and building system repairs — and showed an amortization approach that front‑loads debt service to retire shorter‑lived assets earlier. Staff’s model estimated average annual payments of about $478,000 in the first decade and lower payments in later years.
Several council members commended the approach to match debt term with asset life but urged caution about relying on debt in a way that could crowd operating capacity for hiring. One council member asked whether some items (for example, a PCI study or select equipment) could be funded from the street maintenance fund or from one‑time balances instead of borrowing. Staff noted the street maintenance fund had approximately $800,000 in fund balance and could be used for some items but cautioned that tapping that balance would reduce amounts available for routine annual maintenance.
Given uncertainty in certified taxable values (the appraisal district’s certification is due July 25) and the desire to avoid increasing the INS portion of the tax rate above the council target (18.45¢), council directed staff to delay the sale, re‑run the debt models with certified values and return with a recommendation at a later meeting (staff identified August 11 as a likely issuance date if proceeds are still needed).
Why it matters: Issuing certificates of obligation increases long‑term debt and affects future debt capacity and tax‑rate planning. Council emphasized balancing capital needs with operating capacity and preserving flexibility for staffing and essential services.
What’s next: Staff will re‑run debt capacity analyses after certified values arrive (expected July 25), prepare CIP matrices showing projected asset life and project schedules, and return with a recommendation before scheduling a bond sale.
