PRESENTER: Presenter
Jared Werner, Assistant City Manager
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SUBJECT: Title
Discuss and consider the approval of an ordinance authorizing the issuance of City of New Braunfels, Texas Tax Notes, Series 2026; levying an ad valorem tax in support of the notes; awarding the sale of the notes; approving an official statement, a paying agent/registrar agreement and other agreements relating to the sale and issuance of the notes; and ordaining other matters relating to the issuance of the notes.
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DEPARTMENT: Finance
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COUNCIL DISTRICTS IMPACTED: All districts
BACKGROUND INFORMATION:
At Council’s direction, a vehicle replacement program funded by the issuance of rolling tax notes was initiated in FY 2024. The rolling tax note program is an ongoing vehicle replacement program for the City’s light fleet inventory. It replaces funding these items through the Equipment Replacement Fund and eliminates the need for a recurring annual transfer from the General Fund to the Equipment Replacement Fund for these assets. In addition, if capacity allows, critical heavy equipment could be incorporated into the rolling tax note program as well.
A Tax Note is a council-authorized, short-to-medium-term (up to 7 years) debt obligation used to immediately fund public improvements, equipment purchases, or professional services. It is non-voter-approved, meaning the City Council can authorize its issuance directly by passing an ordinance.
This evening, a $2,000,000 Tax Note is being considered that will support the third issuance of the rolling tax note program for the replacement of light fleet and some heavy equipment. Specifically, this tax note will provide funding for 22 light vehicles that have met the criteria for replacement (20 out of the 22 are for Fire and Police).
The City previously issued the $2,000,000 Series 2023 Tax Notes (FY 2024) and the $3,000,000 Series 2024 Tax Notes as part of the rolling tax note vehicle replacement program.
The debt service associated with the tax note has been incorporated within the proposed I&S (Debt Service) portion of the tax rate for FY 2027 (19.39 cents).
Proceeds from the $2,000,000 Series 2026 Tax Note will be deposited into the City’s depository bank on September 23, 2026.
ISSUE:
N/A
FISCAL IMPACT:
The proceeds of the tax note will support the replacement of light fleet for the City. The annual debt service payment will be structured to align with the I&S (Debt Service) rate for FY 2027, which is proposed to remain at 19.39 cents.
Recommendation
RECOMMENDATION:
Staff recommends approval of the ordinance.