PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
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SUBJECT: Title
Presentation, discussion and possible action approving a resolution giving consent to the issuance of up to $5,000,000 in Unlimited Tax Road Bonds by Comal County Water Improvement District No. 3A.
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: N/A
BACKGROUND INFORMATION:
The Development Agreement (“DA”) between the City of New Braunfels and Southstar at Mayfair, LP (“Southstar”) authorizes up to $620 million in debt for eligible, designated purposes. Comal County Water Improvement District No. 3A (“WID 3A”) will market and intends to sell up to $5 million in Unlimited Tax Road Bonds to provide reimbursements to the developer for road improvements serving WID 3A. The bonds will be paid for by tax revenues secured by approximately $80 million in taxable assessed valuation (as of January 1, 2025) within the boundaries of WID 3A.
WID 3A levied its initial tax in 2024, with WID 3A levying $0.95 per $100 assessed valuation. WID 3A has not yet levied a tax in 2025. Based on the preliminary feasibility of the debt issuance, WID 3A does not expect a change in the total tax rate paid by Mayfair property owners within WID 3A.
WID 3A has never issued bonds or other indebtedness. The Texas Commission on Environmental Quality (TCEQ) generally approves bonds proposed to be issued by water districts, such as WID 3A, but does not exercise regulatory jurisdiction over the issuance of road bonds by a water district. All bonds issued by water districts, including WID 3A, are required to be reviewed and approved by the Attorney General of the State of Texas.
Although the TCEQ has not exercised regulatory jurisdiction over road bonds, WID 3A must nonetheless comply with all other administrative regulations of TCEQ pertaining to water districts, and future bonds of WID 3A pertaining to water, sewer, or drainage infrastructure will be subject to the TCEQ’s continuing jurisdiction and approval process.
The anticipated value of the area within WID 3A is expected to continue to grow considerably and no increase in taxable value from January 1, 2025, is required for issuance of these bonds.
Section 8 [sic] of the Development Agreement outlines the requirements for WID 3A and indebtedness, as well as obligations of Southstar and WID 3A to the City. The Development Agreement contains certain timelines related to notice of the proposed bonds by WID 3A, which were not complied with due to recent changes in legal representation of WID 3A. WID 3A is seeking an administrative waiver of the notice period under the DA for these bonds and has implemented internal procedures to ensure compliance with DA notice requirements in the future.
ISSUE:
The issuance of bonds secured by property tax revenue within Comal Co. WID 3A
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 WID 3A.
Recommendation
RECOMMENDATION:
Staff recommends approval of the Resolution