Title
Consider and take action on an ordinance authorizing the issuance of City of League City, Texas General Obligation Improvement Bonds, Series 2026; levying an ad valorem tax in payment thereof; setting certain parameters for the sale of the bonds; approving the preparation and distribution of an official statement; enacting other provisions relating thereto; and providing for the effective date thereof (Assistant City Manager - CFO)
Staff requests approval on first and final reading.
Background:
If approved, this item authorizes the negotiated sale of GO bonds for Prop A ($5.6 million) and Prop B ($2.5 million) projects within the parameters presented. City Council will have the option to accept a negotiated bid received on August 25, 2026 or direct the team to market and price the issuance within the parameters specified below.
This issuance is part of the GO debt authorized in the May 2019 election where League City voters approved bonds totaling $73 million for certain drainage projects (Proposition A) and $72 million dollars for certain traffic and mobility projects (Proposition B). This will be the fourth issuance of Proposition A and the fifth issuance of Proposition B Bonds. The $8.10 million will be funded by Property Tax Revenue and CIP Sales Tax Revenue. Below is the list of projects to be funded with this issuance.
2019 GO Bond Election Authorized Debt
Prop A - Drainage projects - 20-year debt totaling $5.6 million
Magnolia Creek & Cedar Gully Channel Improvements $4 million
Bayridge Flood Reduction Phase 4 $1.6 million
Prop B - Street/Traffic projects - 20-year debt of $2.5 million
Highway 3 & FM 518 Intersection Improvements $2.5 million
To obtain the lowest possible interest costs, the Bonds were advertised and offered for sale via a negotiated sale process on August 25, 2026 along with $165.9 million in CO debt. The best offer will be presented to City Council at the Council meeting on August 25, 2026. This item is written in such a manner to allow for the negotiated sale to occur within the coming weeks if world events make for an unfavorable market on August 25, 2026.
While the parameters below are broad to allow for flexibility, the Bonds will be structured as follows:
1. Issuance of bonds not to exceed $8,100,000 including all issuance cost;
2. Debt service schedule with level payments; there are no years with interest only payments or balloon payments;
3. Maximum maturity date no later than August 15, 2046 (the bonds will be amortized over twenty years);
4. Best interest rate, fee and repayment terms will be presented to Council on the 25th or delegated for acceptance to the pricing officer.
Parameters set forth in the bond ordinance to allow for flexibility within market conditions:
1. Authorizes the issuance of bonds not to exceed $8,100,000 in principal;
2. Authorizes a maximum maturity date no later than August 15, 2066 (the bonds will be amortized over twenty years);
3. A total interest cost of no more than 4.75%;
4. Authority to negotiate the sale within one year.
The following firms are providing professional services for the sale:
1. The City authorized a contract with Hilltop Securities to provide financial advisory services tothe City on September 9, 2025.
2. The underwriting team consists of TD Securities, Raymond James, The Baker Group, and Huntington Capital Markets.
3. The City authorized Bracewell, LLP to serve as legal counsel for the issuance of bonds.
Attachments:
1. Proposed Ordinance GO
2. List of Projects
3. Draft Preliminary Official Statement
FUNDING
{X} Funds are included in the FY2027 Proposed Budget for the annual debt service payment.
STRATEGIC PLANNING
{X} Addresses Strategic Planning Critical Success Factor #1 Develop and Maintain our Infrastructure