The big picture
The handful of infrastructure projects will be funded through two general obligation, or GO, bonds, a utility system revenue bond and a certificates of obligation bond, according to city documents.
Local governments may finance public infrastructure projects by issuing long-term debt, according to the Texas Comptroller of Public Accounts. While GO bonds require voter approval through a bond election, certificates of obligation bonds do not.
In comparison, revenue bonds are typically backed by a stream of revenue, which can be generated by the project itself, per the Texas Comptroller.
Financial impacts for most of the bonds council approved will be determined in July after assessed property valuations are certified and the fiscal year 2025-26 tax rate is set, according to city documents.
The cost
According to a presentation from Assistant Chief Financial Officer Nathan Parras, the $63.79 million certificates of obligation bond is supported by:
- Property and sales tax
- The Georgetown Transportation Enhancement Corporation
- Stormwater revenues
The $34.68 million GO bond will fund 2015 and 2021 voter-approved Road Bond projects, while the $2.89 million GO bond will be used for animal shelter expenses stemming from a $15 million proposition 67.13% of voters approved in 2023.
The proposition calls for the Georgetown Animal Shelter to join and expand the Williamson County Regional Animal Shelter, which could be approved by involved cities and Williamson County this summer.
Something to note
Rating agency Standard and Poor’s (S&P) issued an AAA bond rating for the city’s tax-supported debt for the second year in a row, according to the presentation.
An AAA rating is the highest rating S&P assigns to debt issuer’s bonds, and it allows the city to sell debt for major expenses at lower interest rates, according to a news release. Bond buyers use the rating in the market to better understand the creditworthiness of a city’s debt, per the release.
“We got to see the direct impact of this rating because we authorized the sale of bonds to fund our infrastructure, and we got more bids to buy our bonds than our financial advisor firm has ever seen,” Mayor Josh Schroeder wrote in a Facebook post.
