UPDATED: Taxpayers On The Hook: San Marcos City Council Approve $160 Million In New Bonds
Staff Reports
The San Marcos City Council authorized the issuance of General Obligation Refunding Bonds in the amount not to exceed $120,000,000 in one year or more series on Tuesday.
The council voted unanimously to approve the bonds, which are to be sold in a negotiated sale with pricing scheduled for May 26.
The ordinance delegates the final approval of the sale within the parameters set forth in the ordinance, including maximum term, interest rate, and issuance amount to the pricing officer.
Dan Wegmiller, the city’s financial advisor, said, “It’s important to know that this is just an opportunity that you all at the city are tracking, and we are tracking with you. The current plans to come back to the council with the update on this refunding is roughly $16.8 million in refunding.”
Mayor Jane Hughson said the council discussed the bonds at a recent budget workshop where the city can save “a bunch of money basically by refinancing.”
According to Wegmiller, staff is expected to bring anything over the projected $16.8 million back to the council before any bonds are issued.
In other news, the council approved the issuance of $40,000,000 of combination tax and revenue certificates of obligation series 2020 for constructing, improvising, designing and equipping of the city’s (1) water and wastewater system; (2) electric utility system; (3) streets including related drainage, sidewalks, trafficimprovements and lighting; (4) municipal buildings to include the City Hall and other city facilities, HVAC improvements, roof replacements and security improvements; (5) stormwater management and flood control facilities; (6) airport, including hangars; (7) public safety facilities to include police and fire station improvements and a new ladder truck and engine; (8) network and fiber optic infrastructure equipment; (9) recreational facilities including parks and sports fields; (10) cemetery including land acquisition; (11) animal shelter; (12) parking including land acquisition; and (13) 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.
The City of San Marcos published a notice of intent to issue the certificates in the San Marcos Daily Record in March and posted the notice on the city’s website last week.
The published notice was for the issuance of certificates of obligations in the principal amount not to exceed $50.5M.
During the April 21, 2020 council Work session the total debt amount approved by the council was reduced to $33M.
These bonds are to be sold in a negotiated sale with pricing scheduled for the week of June 15, 2020.
The item was approved unanimously by the council.
Staff said principal payments are not expected to begin until at least two to three years for the combination tax and revenue certificates of obligation.
NOTICE OF INTENTION 05.07.2020_202005071622061678
And with that the City Council just dropped a $6,000 tax bill on every family. … At the exact time when so many families are trying to dig themselves out of the City’s enforced unemployment.
Thanks!
How much of the bonds issued are refinancing present debt bonds?
This should be the question of every tax payer in SMTX.
As we are seeing a drastic decline in revenue to our city from sale tax revenue(our major source) are these new bonds the bridge in that deficit?
If so does that show the disregard of adjusting our budget expenditures with declining revenues like kicking the can down the road and thinking that all will just work out. Out of the taxpayers pockets!)
I hope these bonds are 100% for the restructuring of present debt and not a foreshadowing of new city buildings,
Lee,
We wanted to let you know we updated this story to included an additional document that should help with your questions.
Thank you for reading,
Corridor News Team
I understand that there is never a good time to extend debt obligations. They are sometimes necessary for needs/wants and future growth.
This may not be the best time to take on that burden as we face an unknown of revenue shortfalls in the next few years. That and how we handle the shortfall should be foremost in the councils decision. Adding the debt at this time when there are unknown implications that will affect every property owner and consumer in San Marcos may not be the best idea.
Might be a time when our city can get by with the offices/buildings they have now.
Just my thoughts