The Burnet City Council on July 27 approved issuing $6 million in certificates of obligation bonds to cover costs associated with the City Hall renovation project and improvements to the Burnet Municipal Airport. Funds from the debt sale will be made available to the city in mid-August.
Through certificates of obligation, local governments can issue debt for necessary projects without voter approval.
In June, the council voted to purchase the old Bealls building on Texas 29 to convert into City Hall.
Funding will be split with $5 million going toward the City Hall project and the remaining $1 million used for a new jet hangar at the airport on U.S. 281, City Manager David Vaughn said.
Jennifer Ritter, managing director of Specialized Public Finance Inc. and the financial advisor for the bond sale, shared results from the sale with council members during the Tuesday meeting.
Seven bids were received for the bond sales, which were closed at 10 a.m. July 27. Interest rates on municipal bonds are currently at a low point, Ritter told the council. The Baker Group, an investment firm based in Oklahoma, offered the lowest interest rate at 1.68 percent for the 20-year bonds.
“The city of Burnet has been pretty successful in selling into low points in the market, and this is no exception,” Ritter said. “When we get below 3 percent, it’s good. Certainly, when we get below 2 percent, that’s great.”
The sale will close on Aug. 18, which is also when the funds will be made available to the city, Ritter said.
The council voted unanimously to approve the sale.