Title
Consider and take action on an ordinance authorizing the issuance of City of League City, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2026; levying an ad valorem tax in payment thereof; setting certain parameters for the sale of the certificates; 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:
Approval of this ordinance will authorize a negotiated sale of $165.9 million in Certificates of Obligation (the “Certificates”) 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 at a later date.
The $165.9 million is detailed by project, terms, and repayment source below:
TIRZ 4 Supported - 6-year CO debt of $6.50 million to be funded by TIRZ Property Tax revenue
Major Thoroughfares: $6.5 million
Brittany Bay Blvd (League City Parkway)
Maple Leaf Drive
Detention (Excavation, Structures & Land)
TIRZ Administration & Interest Earned
4B Supported - 25-year CO debt of $49.50 million to be funded by 4B dedicated Sales Tax revenue
Pat Hallisey Park PK2001 $49.5 million
Revenue Supported - Utility 20-year debt totaling $20.90 million to be funded by Water and Wastewater Sale revenue
West Side Well, GST, Generator and BPS (Calder South) WT1707 $7.1 million
Dallas Salmon WWTP Improvements WW2103 $13.8 million
Revenue Supported - Utility 20-year debt of $6.0 million to be funded by Water Capital Recovery Fee revenue
West Side Well, GST, Generator and BPS (Calder South) WT1707 $6 million
Revenue Supported - Utility 30-year debt of $83.0 million to be funded by Wastewater Capital Recovery Fee revenue
2.0 MGD Expansion of SWWRF (to 6.0 MGD) WW2201 $83.0 million
In order to save on issuance cost, an additional $8.10 million in GO authorized debt will be included in the sale.
To obtain the lowest possible interest costs, the Certificates were offered for sale via a negotiated sale process on August 25, 2026. 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 Certificates will be structured as follows:
1. Issuance of CO not to exceed $165,900,000 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, 2056 (the certificates will be amortized as noted above by project with the maximum at 30 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 ordinance to allow for flexibility within market conditions:
1. Authorizes the issuance of certificates of obligation not to exceed $165,900,000 in principal;
2. Authorizes a maximum maturity date no later than August 15, 2066;
3. A total interest cost of no more than 5%;
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 to the City on September 9, 2025.
2. The underwriting team consists of Raymond James, TD Securities, The Baker Group, and Huntington Capital Markets.
3. The City authorized Bracewell, LLP to serve as legal counsel for the issuance of debt.
Attachments:
1. Proposed Ordinance CO
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