Commission looks to make capital improvement for city
SCREENSHOT TAKEN BY ROXANNA MIRANDA FROM THE SEPT. 15 BROWNSVILLE CITY COMMISSION REGULAR MEETING VIA FACEBOOK LIVE
Brigitte Ortiz | THE RIDER
The City of Brownsville is contemplating the issuance of a series of Certificates of Obligation in the amount not to exceed $10.5 million for various capital improvements.
Noé Hinojosa Jr., chairman, president and CEO of Estrada Hinojosa Investment Bankers, said the improvements include streets, drainage, hike and bike trail, and potential refunding of certain outstanding bonds that the city has.
“As it has been customary, we bring this to you (Brownsville City Commission), in anticipation of a bond sale anticipated to occur sometime November 3rd,” Hinojosa said. “Hoping that the market continues to stay with us.”
The total debt the city has is about $154 million. He said out of this money only $88 million can be refinanced.
“The tax rate for fiscal year 21 … is at .255128,” Hinojosa said. “If you so choose to fund nothing, to do nothing with CIP (Capital Improvement Plan), to do nothing of improvement, then very likely, this time next year, your tax rate will go from .2551 to .2197. So, we view that as an opportunity for you to address CIP needs without impacting the tax rate.”
He said Estrada Hinojosa Investment Bankers are looking to sell bonds on Nov. 3 and if rates remain the same, the corporation is very hopeful that the city will end up paying about $209 million. If the city does $11 million of refunding they may save up to $764,000.
The commission approved for Estrada Hinojosa Investment Bankers to publish a notice of intent.
As projects start up, the Finance Service department uses temporary financing or available funds before they issue debt to fund the projects. After, bonds or certificates of obligation are issued.
The department uses a portion of those proceeds to partially pay back cash to the General Fund (or pay off temporary financing). The capability to pay themselves back as each debt issuance takes place is very important to provide the financial flexibility and continuity as projects are implemented while also complying with debt covenants and federal tax law, according to the agenda item.
In other news, Porter Early College High School GEAR UP program, in partnership with UTRGV and the Brownsville Independent School District, serves low-income, minority and disadvantaged students and their families from underserved communities. The City Commission designated between Sept. 21 and 25, as National GEAR UP Week.
