TOWN STAFF REPORT RECOMMENDATIONS
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Discussion and consideration of all matters incident and related to approving and authorizing publication of notice of intention to issue certificates of obligation, including the adoption of Resolution 25-16 pertaining thereto (Wade Carroll, Town Manager)
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STAFF: Wade Carroll, Town Manager
BACKGROUND:
Due to pending legislation at the State level that would catastrophically limit the Town’s ability to issue debt for needed infrastructure and capital improvements, the Town of Westlake is proposing a maximum issuance of $30m in combination tax and revenue certificates of obligation. Approval of Resolution 25-16 authorizes the publication of required notices; the sale of bonds will require a separate ordinance to be approved by the Town Council/Board of Trustees.
DISCUSSION:
The State of Texas’ 89th Legislature has introduced multiple bills and amendments restricting the ability for local governments to issue debt. These restrictions are currently being considered in various committees and in different forms. The most restrictive would effectively eliminate Westlake’s ability to issue any ad valorem-back debt, even when other revenues are pledged, until well into the next decade unless bonds are issued and funded prior to September 1, 2025. The immediate consequences would include elimination of development requiring new public infrastructure, significant increased costs for other debt that may need to be issued for emergencies or public safety, and the inability to meet donor obligations for Academy improvements.
In order to meet the funding deadline being considered, Westlake tentatively proposes to adopt an ordinance authorizing the issuance of interest bearing certificates of obligation, in one or more series, in an amount not to exceed $30,000,000 for paying all or a portion of the Town's contractual obligations incurred in connection with the planning, acquisition, design, expansion, renovation, equipping, and construction of:
(i) streets, sidewalks, roads, and related improvements, including drainage, landscaping, streetscaping, pedestrian seating, lighting, signage and traffic signalization incidental thereto, and the acquisition of land and rights-of-way therefor (estimated project cost $2.6m);
(ii) pump stations and water tower, including the acquisition of land and equipment therefor (estimated project cost $16m);
(iii) a fire apparatus (estimated project cost $2.4m)
(iv) drainage and flood control improvements, including the acquisition of land and rights-of-way therefor (estimated project cost $300k);
(v) the Sam & Margaret Lee Arts & Science Center (estimated project cost $4m);
(vi) legal, fiscal and engineering fees in connection with such projects (estimated project cost $4.7m).
The Legislature is currently scheduled to adjourn its regular session on June 2, 2025. An update on the need to expedite debt issuance, impacts from approved legislation, and the adjournment or continuance of the 89th Session will be provided at the June 17, 2025 meeting.
FISCAL IMPACT:
The maximum principal amount of the certificates to be authorized is $30,000,000 and the estimated combined principal and interest required to pay the certificates to be authorized on time and in full is $ 67,114,962.85.
STAFF RECOMMENDATION:
Staff recommends approval of Resolution 25-16, as presented
ATTACHMENT(S):
Resolution 25-16
Notice of Intent to Issue
Capital Improvement Plan Schedule
Capital Improvement Plan Project Details
TOWN COUNCIL ACTION/OPTIONS:
1) Motion to approve
2) Motion to amend with the following stipulations (please state stipulations in motion)
3) Motion to table
4) Motion to deny