PRESENTER: Presenter
Jared Werner, Assistant City Manager
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SUBJECT: Title
Discuss and consider approval of a resolution authorizing proceeding with issuance of Certificates of Obligations and further directing the publication of Notice of Intention to issue City of New Braunfels, Texas Combination Tax and Revenue Certificates of Obligation, Series 2026.
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DEPARTMENT: Finance
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COUNCIL DISTRICTS IMPACTED: All districts
BACKGROUND INFORMATION:
Attached for City Council's consideration is a resolution authorizing the publication of a Notice of Intent to issue Certificates of Obligation (COs) in an amount not to exceed $9.6 million to finance 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 June 18, 2026, and City Council ratified the expenditure and contract for construction on July 13, 2026.
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.
The action requested this evening does not authorize the issuance of the Certificates of Obligation. Rather, it authorizes the publication of the required Notice of Intent, which is the first step in the statutory issuance process. The City must complete several additional steps before the obligations can be issued.
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.
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.
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.
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.
Proposed Timeline
• July 27, 2026 - City Council considers 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
FISCAL IMPACT:
The annual debt service related to the Certificates of Obligation will be supported entirely by the NBEDC.
Recommendation
RECOMMENDATION:
Staff recommends approval of the resolution authorizing proceeding with issuance of Certificates of Obligations and further directing the publication of Notice of Intention to issue City of New Braunfels, Texas Combination Tax and Revenue Certificates of Obligation, Series 2026.