Granbury council approves certificates of obligation to fund street repairs

The Granbury City Council voted July 21 to adopt Ordinance No. 26‑41, authorizing the issuance of certificates of obligation to finance street and related improvements across the city.

City finance staff and municipal adviser John Martin of Hilltop Securities presented details of the competitive sale and projected fiscal effects. Martin said the city will issue $18,475,000 in certificates of obligation and that the sale produced a winning 10‑year bid near 3.25 percent. "Granbury has an outstanding credit rating of AA from S and P," Martin said, and he credited the rating and local fiscal management for producing favorable results in the market.

Ava, a city finance staffer introduced during the meeting, and city staff walked the council through the offering materials and the debt‑service schedule. According to the advisers’ presentation, the city’s current interest and sinking (I&S) tax payments are about $4.5 million per year; adding the new issue increases annual I&S payments by roughly $2.4 million, to an estimated $6.9 million, and was projected to increase the I&S tax rate to about $0.25. Martin also described typical issuance costs: an estimated cost of issuance of about $165,000 and an underwriter discount near $66,000, and said a premium from the winning bidder will offset a portion of issuance costs.

Council members thanked staff and the advisers. One council member emphasized the importance of keeping strong fund balances to protect the city’s credit rating and preserve low borrowing costs. After the presentation, Councilmember Weatherly made the motion to adopt the ordinance and Councilmember Elam seconded. The mayor called for the vote; no nays were voiced and the mayor declared the ordinance passed.

The mayor said he would sign the borrowing documents as required and again commended staff for their work preparing the offering. The council then recessed into executive session citing Texas Government Code sections 551.071, 551.072, 551.074 and 551.087; on reconvening the mayor announced no action had been taken in closed session. The meeting adjourned later the same evening.

The ordinance authorizes the issuance of combination tax and revenue certificates of obligation, series 2026, and provides for payment from an ad valorem tax and a limited pledge of the city’s combined water, sewer and electric systems as described in the ordinance and offering materials.