PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
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SUBJECT: Title
Approval of a resolution giving consent to the issuance of Contract Revenue Bonds by Comal County Master Water Improvement District (Veramendi), Unlimited Tax Road Bonds by Comal County Water Improvement District No. 1A, Unlimited Tax Bonds by Comal County Water Improvement District No. 1D and Unlimited Tax Road Bonds by Comal County Water Improvement District No. 1F.
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: N/A
BACKGROUND INFORMATION:
The Development Agreement (“the Agreement”) between the City of New Braunfels and Word-Borchers Ranch Joint Venture (“Veramendi”) authorizes up to $620 million in debt for eligible, designated purposes. The Water Improvement District (“WID”) will market and intends to sell up to $4 million in Contract Revenue Bonds to provide reimbursements to the developer for the financing, operation and maintenance of regional water, sanitary sewer, drainage facilities and other services provided to the subdistricts of the Veramendi WID. Each of the subdistricts - numbers 1A, 1B, 1C, 1D, 1E and 1F- have given the authority by their respective Board of Directors to enter the Master Contract and levy ad valorem taxes to make payments under the Contract Revenue Bonds for the public facilities that benefit all the subdistricts. The bonds will be paid for by tax revenues secured by approximately $659 million in taxable assessed valuation within the boundaries of all the WID’s subdistricts. The subdistricts levied their initial contract tax rates in 2024, with WID 1A levying $0.11 and WIDs 1D and 1F each levying $0.12. Three of the subdistricts - 1A, 1D and 1F- are proposing to levy up to $2 million, $4 million and $5 million, respectively, in unlimited tax and road bonds. It will be the fifth issuance for subdistrict 1A, the second for 1D and the first for 1F. The total amount of debt issuances approved to date for the Master and Subdistricts is $63,575,000.
The Texas Commission on Environmental Quality (TCEQ) provides final approvals for bond issues for water districts and other entities. TCEQ acts as a gatekeeper for Water Improvement District bond issuances and ensures financial integrity, engineering feasibility, and public accountability through a structured application, review, and monitoring process. Districts with outstanding bonds undergo annual audits and financial reporting. TCEQ reviews these for regulatory compliance and tracks districts via its Water District Database and provides compliance support, technical assistance, and policy guidance throughout the bond lifecycle.
The anticipated value of the area in 2025 is approximately $659 million and no increase in taxable value is required for issuance of these bonds. The total tax rate varies by subdistrict but is not expected to change because of the issuance of the Master District Bonds; either the contract, debt or the maintenance components of each Participant’s tax rate will be reduced to accommodate the new debt service requirements through the 2025 issuances.
Section 8 of the Agreement outlines the requirements for the District (and subdistricts) and indebtedness, as well as obligations of the District to the City. The District has undertaken preliminary feasibility of the debt issuance and does not expect a change in the total tax rate paid by Veramendi property owners within the subdistricts.
ISSUE:
The issuance of bonds secured by property tax revenue within the Veramendi WID.
STRATEGIC PLAN REFERENCE:
☐Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☒N/A
FISCAL IMPACT:
No fiscal impact to the City of New Braunfels because the bonds are secured by property tax revenue paid from property owners within the boundaries of the WID.
Recommendation
RECOMMENDATION:
Staff recommends approval of the Resolutions