Council to consider Certificate of Obligation sale to fund hydroelectric repairs

GONZALES – Gonzales City Council has some big decisions ahead, according to new city manager Sean Lally. This week council tackles funding of the city's antiquated and damaged hydroelectric dam system. 

Tuesday night council will convene in a regularly-scheduled meeting, to discuss a multitude of issues; but the biggest ticket item to be discussed is the possible issuance, sale and delivery of $1.7 million in certificates of obligation, to fund the city's much-needed hydroelectric dam repairs.

A certificate of obligation is a form of debt available to governing councils in case of an emergency, needing immediate action, without time for voter referendum.

Texas law usually requires local governments to seek voter approval before debt issuance which is to be repaid from tax revenues. Government borrowing representing an exception to this rule is done by certificates of obligation, which can be used by local governments to fund public projects without voter approval.

According to Texas Municipal League, Texas law provides local governments two options for issuing long-term debt to finance most public works projects: certificates of obligation and general obligation bonds. With certificates of obligation, voters can petition for an election. With general obligation bonds, a city calls an election for voter approval.

Texas Municipal League information states the law also gives local governments the flexibility to issue debt through certificates of obligation on a shorter timeline. This enables the entity to take advantage of favorable interest rates or an opportunity to acquire a property, to make emergency repairs after a disaster or to address a critical public need, without having to wait for the next uniform election date on the calendar.

Under resolutions, council is set to discuss and consider awarding a contract for a Sidewalk Improvement Project on St. George Street and St. Paul Street, authorizing the city manager to execute the agreement.

Council is also slated to discuss and consider date changes for the upcoming May and July meetings. The May meeting would fall on Election Day. The July meeting would fall on Independence Day.

Council is also expected to discuss and consider: the appointment of members to the Gonzales Museum Advisory Board; Discuss and consider authorizing the city manager to execute an oil, gas and mineral lease between the city and Tri-Force Explorer I, LP; allowing Gonzales Main Street to use Confederate Square for The Main Street Summer Concert Series and The Star Spangled Spectacular – and to permit the sale and consumption of alcoholic beverages; authorization for Hill Country Tech Guys to install fiber networking for the City of Gonzales; and authorizing Norma's House to hold a 5K Run Walk on April 1.

Under staff reports, council will receive the city's financial report.

Council will meet for an executive session authorized by government code 551.071 consultation with attorney; Closed Meeting (b) Settlement Offer; JMOS Realty Company, LLC

Upon returning to open session council will discuss and consider a resolution resulting from the Executive Session authorizing revisions to the Loan Agreement and Note between Gonzales Economic Development Corporation and JMOS Realty, reducing the current repayable balance to $200,000 contingent up JMOS Realty refinancing their loan with a lender within 60 days.

Gonzales City Council meets tonight, Tuesday, March 7, at Gonzales Municipal Building, in Council Chambers.