Of the $56.4 million, $28.8 million will go toward general fund projects while $27.6 million will go toward utility fund projects, according to Schertz Financial Advisor Andrew Friedman.
Why it matters
According to agenda documents, projects selected to be funded through the debt issuance include improvements to Main Street, Kramer Farm Road and the Buffalo Valley South neighborhood.
James Walters, the city’s finance director, said that funding of these projects would likely not have any impact on the city’s Interest & Sinking tax rate, part of the city’s property tax rate specifically related to paying off debt. The current I&S rate in Schertz is $0.3326 per $100 taxable value.
“The bonds were structured in a way to not raise taxes. This is within our allotted capacity, so we believe the tax rate will remain the same even after this sale,” Walters said.
Part of the debt issuance process was Walters, Friedman and other city staff taking part in a call with credit rating institution S&P Global about the local Schertz economy and the financial practices of the city. Friedman said that the city maintains an AA+ credit rating with S&P, just under the highest rating of an AAA.
“What that allows us to do is to sell our debt as cheaply as possible, generating the lowest interest rate that we can,” Friedman said.
Next steps
The funds will be delivered on August 13, Friedman said. No petition was filed to push the sale of debt to a November election, according to agenda documents.
