City Weighs Bond Sale Method That Could Favor Local Buyers

SAN ANGELO, TX — The San Angelo City Council on Tuesday heard a presentation outlining the next steps for issuing $41.66 million in general obligation bonds to fund improvements to the city’s Coliseum.

The presentation was delivered by Vince Viaille, managing director of Specialized Public Finance Inc. Finance Director Tina Dierschke introduced the item, noting that the briefing was intended to familiarize new council members with the bond issuance process.

A general obligation fund is a municipal bond where the repayment of principal and interest is guaranteed by the issuing government's general revenues.

According to city documents, a competitive bond sale is tentatively scheduled for July 14, with final council approval set for July 15. If approved, the funds would be delivered to the city by Aug. 14 and deposited into the capital project fund.

Viaille explained that the city may choose between two sale methods: a competitive bid or a negotiated sale. While competitive bidding provides maximum transparency and allows bidders to compete solely on interest rates, a negotiated sale would give the city more control — including the ability to prioritize local buyers.

“If we want more control over local people getting bonds to ensure they have an opportunity to do that, we would go negotiated,” Viaille said. “That way they would have an opportunity in the first couple of hours of the order period where we could only take San Angelo orders.”

Council members asked about potential impacts on rates, transparency, and local participation. Viaille assured them that local banks could participate under either method but said that a negotiated sale would give local institutions a guaranteed early window to buy bonds.

“We’re negotiating the interest rate with the underwriter, so we will make sure they are on market,” Viaille said. “At that time, we will also present the council with comparable market issues that were done recently, so you can see where you sold relative to everybody else.

"We have got a list of the banks that are in San Angelo, and the financial institutions that would be submitting bids if they wished," he said. "We'll contact them to make sure they have the bid specifications, all of the offering documents, and disclosure documents necessary to put their bid in. If it's local people, we will also assist them in putting their bid in if that is their desire. So we have a pretty good handle on who the potential bidders would be in San Angelo. We're also open if someone knows of someone who wants to submit a bid, we'd love to find out who would be. We're not going to preclude anybody."

The council did not take any action on the item. 

"I would encourage everybody that we're going to make some decisions here within the next week or two on which way to go with this," Mayor Tom Thompson said. "And I sure like leaving it open for the local people, because they've always been interested in it. They want to have skin in the game. It's a good way to carry on."