Marble Falls City Council completes $20M certificates of obligation sale
Marble Falls City Council authorized the sale of more than $20 million in certificates of obligation bonds during its Aug. 3 meeting. The funds will be made available to the city by Sept. 1.
The bonds were sold in two separate certificates and will pay for projects such as the relocation of the city’s wastewater treatment plant, the Backbone Tributary Bypass Channel project, and the construction of a two-way Avenue N bridge over Backbone Creek.
The smaller of the two, a $3 million certificate to improve roads, bridges, low-water crossings, parks, and some improvements to the water and wastewater treatment plants, was purchased by HilltopSecurities with a fixed 1.75 percent interest rate.
The interest rate is much lower than the 2.5 percent interest rate anticipated by bond counsel, explained Mark McLiney, senior managing director of SAMCO Capital Markets, the company overseeing bond sales for the city.
“In April … everybody you talked to, including me, said rates were going at two and a half or three percent because of how much inflation is out there,” McLiney said. “Over the last several months, the interest rates have declined and, as of Monday, hit 1.17 percent. A lot of that is an effect of what’s going to happen because of the COVID (Delta) variant. Regardless, we’re the beneficiary of this.”
Roughly $1.8 million of the bond will be put into the general fund balance and the remaining $1.2 million will go toward the utility fund, McLiney explained during the meeting.
The remaining $17.8 million certificate is covered by the Texas Water Development Board, which awarded the city zero-percent interest loans through Flood Infrastructure Funds in April. The board also awarded the city more than $14 million in grant money to cover the same projects.
“A zero-percent is incredible, and free money … is even better,” Councilor Dee Haddock said.
The sale was previously discussed during a June 1 council meeting.