The city of Corpus Christi plans to issue about $162 million in bonds in the coming weeks.
Bonds are debt securities issued by government entities to finance day-to-day obligations and to finance investment projects such as the construction of schools, highways or sewer systems.
The bonds will be repaid over a period of 20 years.
During its regular meeting on Tuesday, the city council authorized the issuance of $20 million in bond certificates, $40 million in general improvement bonds and $102 million in bond- combined utility system revenues. The money will be used to fund Capital Improvement Program projects as well as Bond 2020 projects that were approved by voters in the November 2020 election.
Cities can either pay for the projects however they can or issue bonds, City Manager Peter Zanoni said. Paying for large projects through an annual budget process can be difficult.
“We can borrow large sums of money to do big projects. A and the community can benefit from it over 20 years, instead of waiting 20 years, saving enough money and doing the work,” said said Zanoni. “We pay them back over time. It’s a bit like buying a house.”
City officials expect to earn between 4% and 5% interest on the bonds when they issue them. Officials also factored a higher interest rate, up to 5.5%, into the city’s debt management plan. The last time the city issued bonds in September 2021, an interest rate of 1.95% was guaranteed, Zanoni said.
The city is expected to receive the proceeds of the bond by the end of this fiscal year, September 31.
The $60 million in bond certificates and general bond bonds will be repaid from property tax revenues. The $102 million in revenue bonds will be repaid from utility revenue streams.
Here’s what bonds will pay
Bond Certificates
- Solid waste complex and composting facility: $9.5 million
- Park facility and warehouse: $330,000
- Modernization of City Hall buildings and major repairs: $1.6 million
- Library improvements: $1.7 million
- Improvements to Department of Health facilities: $2 million
- Police Training Center: $5.4 million
General Duty Bonds
Street improvements: $30.5 million
Park improvements: $6.75 million
- Improvements to 14 parks
- North Beach restroom and parking upgrades
- Texas State Aquarium Rescue Center
- Bill Witt Park Pool and Facilities
- West Guth Park Improvements
Public Safety: $2 million
- Acquisition of land for fire station No. 3
- Police Training Academy Design
Revenue Bonds
Wastewater service improvements: $40 million
- Wastewater treatment plant improvements
- Wastewater infrastructure improvements in support of street reconstruction
- Sewage Lift Station Upgrades
- Inspection, maintenance and replacement of underground infrastructure throughout the city
Water service improvements: $30 million
- Raised Storage Tank Improvements
- Water treatment plant upgrades
- Citywide water main replacements
- Relocation of the water pipe for Harbor Bridge
- Inspection, maintenance and replacement of underground infrastructure throughout the city
- Water infrastructure improvements in support of street reconstruction
Upgrades to stormwater utilities: $30 million
- City-wide stormwater improvements
- Improvements to stormwater infrastructure in support of street reconstruction
- Inspection, maintenance and replacement of underground infrastructure throughout the city
The city has high quality bond ratings
The city’s ratings on the General Obligation and Utility Revenue Obligations are in the high quality category.
Moody’s, Standard and Poor’s Global Ratings and Fitch reaffirmed the city’s general bond ratings of Aa2, AA and AA, respectively, and the city’s utility revenue bond ratings of Aa3, AA- and AA- , respectively, all with a stable outlook.
City bond ratings are very similar to an individual’s personal credit ratings, Zanoni said. They indicate to investors the capacity of the city to repay its debt. The higher the credit rating, the higher the demand from investors, which translates into a lower interest rate and savings for the taxpayer.
“During difficult economic times and a global pandemic, the city of Corpus Christi has maintained and even improved its bond rating,” he said. “We will continue to be good stewards of taxpayers’ money for the good of our community.”
Kathryn Cargo tracks business openings and developments while reporting on the impacts of city government decisions.Check out our subscription options and special offers at Caller.com/subscribe.
Related coverage
After:Corpus Christi City Council to Grant $500,000 a Year to Museum of Science and History
After:Pool for Corpus Christi’s Southside: Bill Witt Park Facility Gets Pool
After:Water restrictions are in place for Corpus Christi. Here’s what you need to know.
Comments are closed.