Marble Falls projects get $23M boost
Marble Falls sold more than $23 million in bonds on Aug. 1 to help fund key city projects, including ongoing improvements to Avenue Q. Staff photo by Nathan Bush
Over $23 million in certificate of obligation bonds were sold by the city of Marble Falls on Aug. 1 to fund capital improvement projects across town, including the new wastewater treatment plant, Nature Heights roadway extension, roadwork on Avenue Q, sidewalks in the Pecan Valley neighborhood, Fire Station No. 1 renovations, and the RR 1431-U.S. 281 intersection makeover.
City Financial Advisor Andrew Friedman of SAMCO Capital Markets was excited to unveil the bonds’ interest rates to city councilors during the Tuesday meeting. The winning bid came from Wells Fargo at a true interest cost of 3.98 percent over 20 years.
“This gives us a degree of confidence that we received the best interest rate available to the market today,” he said.
Mayor Dave Rhodes said the low-interest rate was a reflection of the market’s trust in the city’s financial makeup.
“Getting a sub-four (percent interest rate) says a lot about our city and how we’re seen by financial markets out there,” he said.
Bond rating agency Standard and Poor’s graded Marble Falls a double A-minus in a recent review of the city’s credit. The city could improve that rating in future years. Improving to a double A would be a financial win for the city, Friedman said.
“The higher our credit rating, the lower our borrowing costs over time,” he said.
To ensure the city improves its rating, S&P had a few suggestions in its report.
“They want to see the city continue to maintain those fund balances that (city officials) have worked so hard to build up over the last couple of years,” Friedman said. “They want to see as we handle this growth and the debt we’re taking on for those capital improvements that we maintain that and our audit shows that.”
The certificates of obligation issued on Aug. 1 will be supported by two separate city funds.
“These are supported in part by the general fund and in part by the utility system,” Friedman said. “In both cases, as you have received certified values, just this past week, this is structured and meets the target of what we’re working toward.”
Councilor Bryan Walker told DailyTrib.com that the purpose of selling the bonds was to streamline financing.
“Your CO is basically pledging your tax revenue,” he said. “It’s lumping it all in so that the part that’s being financed is being financed at the same time with one interest rate and one lender. That way, we don’t have 30 different payments to make. We’re basically consolidating everything.”
Plans to sell the bonds have been in the works for a while, Rhodes said.
“We didn’t decide early in the week that we were going to sell $23 million worth of bonds to go have a good time and build stuff,” he said. “Most of this stuff has been on the books for quite some time. We’re at the stage now where we have to fund all the portions of the projects.”