DALLAS — College Station is bringing two tranches of general obligation debt worth about $34.6 million to the competitive market tomorrow, in part to start funding a new convention center.
The central Texas town, which is home to Texas A&M University and its 48,000 students, will offer $31.3 million of certificates of obligation and $3.3 million of general obligation improvement bonds. Both tranches are structured as serials maturing in 2010 through 2029. Insurance will be at bidder’s option.
Proceeds from the bonds will fund street improvements and construction of some hiking and biking trails, while proceeds from the certificates will fund completion of a new city-owned cemetery, as well as land acquisition and the design phase of a new convention center.
Construction of the new cemetery began last year after nearly a decade of discussion by city officials, as space is running out at the current cemetery. Chief financial officer Jeff Kersten said some A&M alumnae that used to live in College Station have expressed a desire to be interred within the city.
Kersten said the convention center is also “an idea that has been bounced around for about 10 to 12 years and there’s been a couple different iterations.”
“There’s one full-service hotel in town that has some convention space, but the new convention center will have a significant amount of space that will allows us to grow the pie, so to speak, in our ability to bring more and larger conventions to town,” he said.
First Southwest Co. is the financial adviser to the growing city, and McCall, Parkhurst & Horton is bond counsel.
Moody’s Investors Service assigned its Aa3 rating to the sale and affirmed the rating on about $150 million of GO debt outstanding following this week’s sale.
Analysts said the city’s tax base averaged nearly 11% annual growth the past five years to $5 billion for fiscal 2009 with preliminary estimates showing another 10.6% increase next year to $5.4 billion.
Standard & Poor’s assigned an AA rating to the debt, citing the city’s expanding economic base that’s anchored by A&M, “sustained healthy property tax-base growth that has continued, albeit more slowly, despite the national recession, consistently strong financial practices and position,” and moderate overall debt coupled with a manageable capital-improvement plan.
College Station’s current population of about 91,300 is up nearly 34.5% from the start of the decade and 145% higher than the 1980 Census figure of about 37,200 residents. The city’s fiscal 2009 taxable assessed value of $5.02 billion is 12% higher than the year earlier and almost double the 2002 figure.
In November, voters approved a bond package of nearly $77 million and the city will have about $80.6 million of authorized but unissued debt after this sale, including some capacity from referendums passed in 2003 and 1984.
Kersten said officials anticipate coming to market annually over the next several years to fund utility projects, complete the new convention center, and expand libraries, streets and parks.
