City council approves issuance of certificates of obligation

During its Aug. 7 meeting, Waxahachie City Council unanimously approved an ordinance for the issuance of certificates of obligation, which will fund various improvements in the city, in the amount of about $37 million.

Certificates of obligation are used by cities and counties to fund public works. Unlike general obligation bonds, certificates of obligation do not require voter approval.

“Earlier today, we were working with our financial advisor and went out to the market and were able to price those bonds,” Chad Tustison, senior director of finance, said. “We were able to do so at a 4% interest rate, which is a great interest rate for what we’re trying to do.”

The certificates of obligation will be used to fund 24 projects, including street projects, parks projects, public safety projects, water projects and wastewater projects, including Mustang Creek Trail connection and parking, a street project on Farley Street, the purchase of a fire engine, and more. These projects are part of the city’s five-year capital improvement plan, which Tustison presented during a city council work session April 25.

During the process to issue the bonds, the city underwent a due diligence process with rating agencies, where the city’s financial management and structure are inspected and given a rating. The city received a double A rating, which Tustison said is “a very strong, high-tiered rating, so we’re proud of that.”

“These are independent parties that are nationally recognized or internationally recognized, so to have such a rating demonstrates the financial condition of the city and the positive aspects of it,” council member Patrick Souter said.

With approval, the funds are expected to arrive in early September before the new fiscal year and start of the new budget, Tustison said at the June 5 council meeting.

Originally published August 14, 2023 - https://www.waxahachiesun.com/business/city-council-approves-issuance-of-certificates-of-obligation/article_47fd8d6e-3b0c-11ee-a9ff-0750c012fe00.html