PRESENTER: Presenter
Jessica Williams, Chief Financial Officer (NBU)
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SUBJECT: Title
Discuss and consider approval of an Ordinance Authorizing the Issuance of "City of New Braunfels, Texas, Utility System Revenue Commercial Paper Notes, Series 2026A and Series 2026B" in an Aggregate Principal Amount of Not to Exceed $125,000,000 to Provide Interim Financing to Pay Project Costs for Eligible Project for the City's Utility System, Approving and Authorizing the Execution of Agreements to be Entered into in Connection with the Commercial Paper Notes and Resolving Other Matters Incident and Related Thereto.
DEPARTMENT: NBU
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COUNCIL DISTRICTS IMPACTED: All
BACKGROUND INFORMATION:
On March 20, 2019, as a part of NBU’s plan to manage the issuance of debt efficiently, the NBU Board authorized the use of a commercial paper program, in the aggregate principal amount of not to exceed $75 million, with an initial expiration date of May 29, 2022. The commercial paper program was subsequently approved by City Council on March 25, 2019. This program has allowed NBU to access funds at lower short-term interest repayment rates, remain flexible and liquid, and quickly access funds when needed.
On December 9, 2021, the NBU Board approved the extension of the commercial paper program with JPMorgan Chase Bank, National Association to May 29, 2025, pursuant to the terms contemplated in the Revolving Credit Agreement and the Note Purchase Agreement of the existing commercial paper program. This extension has continued to allow NBU to remain flexible in funding its capital program to meet continued growth at the most economical cost.
On June 29, 2023, the NBU Board approved the First Amendment to the Note Purchase Agreement of the existing commercial paper program to reflect changes from the London Interbank Offered Rate (LIBOR) Index to the Secured Overnight Financing Rate (SOFR) Index as the benchmark loan index associated with the Series 2019B Notes.
On December 12, 2024, the NBU Board approved the second extension of the commercial paper program with JPMorgan Chase Bank, National Association, to May 29, 2028, pursuant to the terms contemplated in the Revolving Credit Agreement and the Note Purchase Agreement of the existing commercial paper program. This extension has continued to allow NBU to remain flexible in funding its capital program to meet continued growth at the most economical cost.
The Board, at its April 30, 2026, Board Meeting, authorized NBU to enter into a new commercial paper program agreement with JPMorgan Chase Bank, increasing capacity from $75 million to $125 million. This program increase will ensure that NBU maintains short-term operational capital fluidity.
ISSUE:
The NBU Board of Trustees, at its April 30, 2026, Board Meeting, authorized NBU staff to enter into a new commercial paper program agreement with JPMorgan Chase Bank, increasing capacity from $75 million to $125 million.
STRATEGIC PLAN REFERENCE:
☐Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☒Community Well-Being ☐N/A
FISCAL IMPACT:
There is no direct impact to the City of New Braunfels from the agreement with JPMorgan Chase Bank, as described above.
Recommendation
RECOMMENDATION:
NBU staff recommends approval of the ordinance.