Round Rock City Council approved $115 million in debt issuance at its meeting April 24. The debt is spread across three programs and will contribute to park and transportation projects as well as city fleet assets.

The gist

Council pushed through three items allowing the city to issue debt, broken down below:

• $90 million in 2023 voter-approved general obligation bonds
• $20 million in certificate of obligation bonds
• $5 million in limited tax notes

The GO bonds will go towards financing parks, recreation, and sports projects and facilities including the Old Settlers Park build-out, Clay Madsen Recreation Center remodel, Sports Center expansion, Lawn at Brushy Creek park development, trail expansion and Play for All Park improvements.

“It allows the city to continue the work out at Old Settlers Park,” Director of Finance Kevin Klosterboer said.

CO bonds help pay for the city's contractural obligations, and the $20 million will go towards Round Rock's 2023 five-year roadway master plan. Some transportation projects in the plan include several Gattis School Road segments, Harrell Parkway, Kenney Fort segments 5 & 6, Old Settlers Boulevard, Red Bud Lane and Hwy. 79.

Lastly, the city will use the limited tax notes to purchase city vehicles.

The city also received a AAA bond rating, the highest possible, from credit rating agency Standard & Poor's. This can help save money on interest, as well as garner more bidders, according to Garry Kimball, a financial advisor with Specialized Public Finance.

How it works

GO bonds serve as long-term debt tools that states and cities issue to fund major capital projects such as infrastructure and public facilities. These bonds require voter approval. COs function as short-term debts to finance public projects without needing voter approval. The city repays the debt through taxes, fee revenues or a combination of both.

Limited tax notes provide short-term funding repaid through ad valorem taxes, and do not require a public vote.