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 the City of New Braunfels, Texas combination tax and revenue certificates of obligation, series 2026; levying an ad valorem tax and pledging certain surplus revenues in support of the certificates; awarding the sale of the certificates; approving an official statement, a paying agent/registrar agreement and other agreements relating to the sale and issuance of the certificates; and ordaining other matters relating to the issuance of the certificates.
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DEPARTMENT: Finance
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COUNCIL DISTRICTS IMPACTED: N/A
BACKGROUND INFORMATION:
The New Braunfels Economic Development Corporation (NBEDC) intends to support $9.6 million in Certificates of Obligation for the funding of the Coll Street drainage, roadway, and utility underground conversion project.
The total project funding was approved by the New Braunfels Economic Development Corporation (NBEDC) on 6/18/26, and City Council ratified the expenditure and contract for construction on 7/13/26.
To finance the project, the NBEDC has recommended utilizing Certificates of Obligation issued by the City. Although the debt service will be paid entirely from NBEDC sales tax revenues, issuing the debt through the City allows the project to benefit from the City's strong credit rating and lower borrowing costs. This financing approach has historically been used for significant NBEDC funded public improvement projects and provides additional financial flexibility while minimizing financing costs.
A Notice of Intent to issue these certificates of Obligation was approved by City Council at the 7/27/26 meeting, This notice described the proposed financing, maximum principal amount, source of repayment, anticipated authorization date, and other information required by state law and was posted in the Herald Zeitung on 8/5/26 and 8/12/26 and continuously on the City’s website for at least 45 days.
Council also approved a Reimbursement Resolution on 7/27/26 that authorizes the reimbursement of eligible project costs, up to $9.6 million, from the future Certificate of Obligation proceeds.
As stated earlier, The debt service related to these certificates will be entirely supported by the NBEDC (sales tax).
If approved, the closing for these certificates will take place on 10/28/26.
Certificate of Obligation Issuance Process
1. Notice of Intent: City Council authorizes publication of a Notice of Intent describing the proposed financing, maximum principal amount, source of repayment, anticipated authorization date, and other information required by state law. (7/27/26)
2. Public Notice Period: The notice is published in a newspaper at least 46 days before the authorization date and posted continuously on the City's website for at least 45 days. (8/5/26 & 8/12/26)
3. Council Authorization: Following the notice period, the City's Financial Advisor presents the final financing terms, Bond Counsel presents the authorizing ordinance, and City Council considers approval of the Certificates of Obligation. The attached ordinance includes a variety of blank information that will be filled out once the sale is finalized (9/28/26).
4. State Review and Closing: Upon Council approval, the issuance is reviewed by the Texas Attorney General, registered by the Texas Comptroller, and subsequently closed, at which time the City receives the proceeds.
Timeline
• July 27, 2026 - City Council approved the Notice of Intent.
• September 28, 2026 - City Council receives the bid results and considers the ordinance authorizing the issuance of the Certificates of Obligation.
• October 28, 2026 - Closing of the Certificates of Obligation; proceeds are deposited with the City's depository bank and become available to fund construction of the project.
ISSUE:
N/A
STRATEGIC PLAN REFERENCE:
☐Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☒Community Well-Being ☐N/A
Performance Measure: Progress towards acres of parkland per 1,000 residents metric as established by updated Parks and Recreation Master Plan.
FISCAL IMPACT:
The proceeds for the Certificates of Obligation will be used to support the Coll Street drainage, roadway, and utility underground conversion project. The annual debt service related to the Certificates of Obligation will be supported entirely by the NBEDC (sales tax).
Recommendation
RECOMMENDATION:
Staff recommends approval of the ordinance.