AGENDA CAPTION:
Title
Consider approval of Ordinance 2026-15, on the first and final reading, authorizing the issuance and sale of an amount not to exceed $15,255,000.00 of Combination Tax and Revenue Certificates of Obligation, Series 2026, levying an ad valorem tax and pledging certain surplus revenues in support of the certificates; approving an official statement, a paying agent/registrar agreement for improving, constructing, equipping, acquiring, or designing the city's: airport; parks and recreation facilities; streets, alleys, and sidewalks; public safety facilities; stormwater management for flood control and drainage; technology infrastructure and facilities; electric utility system; and the payment of professional services in connection therewith including legal, fiscal and engineering fees and the costs of issuing the certificates of obligation and other matters related thereto; and providing for the approval of this Ordinance 2026-15, on one reading as authorized by state law.
Body
Meeting date: April 21, 2026
Department: Finance and Engineering/Capital Improvement
Amount & Source of Funding
Funds Required: N/A
Account Number: N/A
Funds Available: N/A
Account Name: N/A
Fiscal Note:
Prior Council Action: September 16, 2025, City Council approved the Fiscal Year 2026 Capital Improvement Program (CIP). February 3, 2026, City Council received a presentation on the CIP projects included in the Fiscal Year 2026 CIP at a work session. February 17, 2026, City Council approved Resolution #2026-32R, authorizing proceeding with the issuance of Certificates of Obligation and directing the publication of Notice of Intention to issue the certificates.
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Background Information:
The Fiscal Year 2026 Capital Improvement Plan (CIP) was approved during the budget process and adopted on September 16, 2025. At the February 3, 2026, City Council Work Session, Shaun Condor, Director of Engineering/Capital Improvements, presented an overview of the projects included in the plan. CIP projects are funded by various sources, including cash, impact fees, grants, and debt obligations.
This item is for CIP projects that will be funded by certificates of obligation, which does not include water and wastewater projects. Water and wastewater projects will be financed through a separate issuance of revenue bonds, as the Water and Wastewater Utility has its own bond rating and issues debt backed by its utility revenues.
The first step in issuing certificates of obligation is for City Council’s consideration of a resolution directing the publication of a notice of intent to issue the certificates. City Council passed Resolution #2026-32R on February 17, 2026. Two public notices were published on February 22, 2026, and March 1, 2026, in the San Marcos Daily Record and the notice is posted on the City’s website. The final action by City Council is the consideration of this ordinance authorizing the issuance of the certificates of obligation.
As part of the issuance process, the City applied for a rating from S&P Global Ratings. S&P affirmed the City’s AA rating with a stable outlook. This strong rating helps the City secure lower interest rates on future debt issuances.
Projects to be funded by certificates of obligation cover multiple areas, including the airport, public safety, parks and recreation, streets, technology infrastructure, electric, and stormwater. Each project is tied to a specific fund, and the associated debt will be repaid by that fund.
The amount of debt obligations to be issued for each fund is below:
General Fund $8,655,000
Stormwater $4,250,000
Electric $2,350,000
Total All Funds $15,255,000
The certificates of obligation are expected to be sold in a competitive sale with bids scheduled to be received the morning of April 21, 2026. A draft of the ordinance is attached, and the final version will be provided on April 21, 2026, after the certificates of obligation are priced. The attached draft is not complete because the information will not be known until after the certificates are priced. The final version will include all information.
Council Committee, Board/Commission Action:
N/A
Alternatives:
N/A
Recommendation:
City Council approve the ordinance authorizing the issuance of Combination Tax and Revenue Certificates of Obligation, Series 2026, in the amount not to exceed $15,255,000.