Finance adviser outlines plan to issue $5 million certificates of obligation for capital projects

Mark McLaney, financial adviser with Samco Capital Markets, told the Ennis City Commission the city can borrow without increasing the citizens’ I&S portion of the tax rate and laid out a notice-and-sale timetable needed before setting the tax rate. “We’re looking at perhaps borrowing $5,000,000 this year,” McLaney said, and added the city could return next year for as much as $25,000,000 if projects and taxable values warrant it.

McLaney said the approach would use scheduled drops in existing annual debt service to absorb new borrowing so the interest-and-sinking tax rate would not rise. He explained the legal steps of a notice-of-intention resolution, public posting requirements and a typical August sale date: “The notice of intention resolution is a resolution city commission authorizes, says city commission intends to borrow blank amount of money for blank projects,” McLaney said, outlining the publication and timing requirements.

City staff and McLaney stressed that projects must be identified before sale; money tied to a notice can only be used for projects listed in that notice. McLaney described typical flexibility practices—naming parks and a “bottom bucket” for streets so leftover proceeds can be used for other infrastructure if needed. He also described a scenario that would push more principal into early years to reduce overall interest costs.

The presentation concluded with a suggested timetable that would bring a notice of intention to the commission in June and an authorization ordinance in late July or early August should the commission choose to proceed. No final borrowing action was taken; the presentation was to inform the commission and solicit direction on whether to move forward with the notice and project list.