OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

San Antonio City Budget Work Session on Debt, Bond, Capital Delivery, and Public Works - September 2, 2026

City Council — Wednesday, September 2, 2026
BodySan Antonio, Texas
SessionCity Council
DateWednesday, September 2, 2026
StatusFILED
Video Record
0:00 / 3:21:32

Transcript — Verbatim
0:45

Good afternoon.

0:46

The time is now 106 p.m.

0:49

on Wednesday, September 2nd, 2026, and the City of San Antonio budget work session is called to order.

0:54

Madam Clerk, please call roll.

0:56

Councilmember Corps.

0:58

Councilmember Mickey Rodriguez.

1:00

Councilmember Via Grande.

1:03

Councilmember Mungia.

1:05

Councilmember Castillo.

1:07

Councilmember Gavar.

1:08

Here.

1:09

Councilmember Allerete Gavito.

1:11

Here.

1:11

Councilmember Mesa Gonzalez.

1:13

President.

1:13

Councilmember Spears.

1:15

Councilmember White.

1:17

Mayor Jones.

1:18

Here.

1:19

Mayor, we have a quorum.

1:20

Great.

1:20

Thanks, Madam Clerk.

1:21

So today we'll be reviewing the debt management plan, the uh proposed bond program update, uh, capital delivery department and capital budget, as well as public works.

1:31

Eric, over to you.

1:33

Yep, Mayor.

1:34

Uh, so we'll start off with Troy and the debt management plan, then transition to uh Mike Shannon, and then uh and then wrap up with uh art.

1:45

Good afternoon, Mayor and Council Troy Elliott, Chief Financial Officer.

1:48

I have the honor of kicking off with the debt management plan.

1:51

You know, first of all, I'd like to start with um kind of you know what is a debt management plan.

1:55

You know, at a high level, debt management plan basically governs you know how we manage our debt, how much debt do we currently have, how much can we borrow, um, how we going to pay for that debt, then also how are we going to manage that over time.

2:10

I think as we go through the debt management plan, a lot of these slides are gonna seem very familiar to you all.

2:14

We saw them in January.

2:16

Basically going through kind of the basic building blocks of what a debt management plan is.

2:20

I think there's value going through that for the viewing public as to give them some context as how we come up with our capacity numbers and things of that nature.

2:27

First of all, when we talk about the basic building blocks of a debt management plan, what type of debt do we do we actually issue?

2:34

We've talked about these quite a bit here lately, the general obligation bonds, of course, which will support a 2027 bond program.

2:40

These are voter authorized, they're backed by property taxes, and the full faith and credit of the city of San Antonio.

2:46

We also have that are also ad valorant backed, we have our certificates of obligations and tack notes.

2:51

Certificate of obligations are also backed by property taxes.

2:54

They are not voter approved.

2:56

They typically um require a 45-day notice requirement to the public before we can go through and actually issue though issue that debt.

3:04

They typically have um maturities when 25 to 30 years.

3:08

Tax notes have a different type of tool that we use in our debt management plan and usually have a shorter duration in terms of maturities.

3:15

They are also backed by property taxes, they are also not voter-approved, and as I mentioned, they typically have up to a seven-year maturity.

3:22

Revenue bonds are um backed and pledged by other sources to be, for example, like the airport, and we just issued over $800 million in airport bonds.

3:31

Those are backed by the airline revenues and by the um revenues generated generated by the airport itself.

3:37

They are not voter-approved typically, and they're backed by those other revenue sources.

3:41

And we'll talk about kind of those revenue bonds that we have actually issued and what we have outstanding.

3:48

When we talk about the the primary assumptions and components of debt management plan, there's really five major pieces of our debt plan.

3:55

We've talked um quite a bit extensively about our targeted debt service rate of 21 cents.

4:00

You know, that debt service rate of 21 cents has been in place since 2004, and largely our debt capacity has been a function of that stable debt service tax rate and ascending uh value growth on our taxable valuations.

4:14

We also talk about the duration of our debt.

4:16

You know, one of the big primary levers they have as we manage our debt plan is how long do we issue that debt?

4:22

You know, we talk about in terms in times of when we have decreasing values like today.

4:27

We may lengthen that average debt life so that we can actually generate more capacity, and then when values are increasing, we'll shorten those so it's a major level uh lever in the management of our debt management plan.

4:39

Then lastly, we have our interest rate or our credit ratings, just like buying a house or a car.

4:44

The better your credit rating, the lower cost of that debt's gonna be.

4:47

And since we issue debt in that 25 to 30 year maturity range, it actually makes quite a bit of difference over time in terms of the higher interest rate, higher credit ratings and what that impact is on those interest rates.

5:00

And as we manage this debt plan, and as we do everything from the city perspective, we have moderate conservative projections with the hope to actually outperform those projections as we move forward.

5:13

As we talked about, our overall debt service, our overall tax rate is made up of two point two components.

Discussion Breakdown — Share of Meeting
Infrastructure███████████████████████████27%
Budget████████████████████20%
Public Works██████████████████18%
Debt Management██████████████14%
Public Engagement████4%
Capital Projects███3%
Transportation Safety███3%
Public Safety███3%
Infrastructure Damage Assessment██2%
Summary of Proceedings

San Antonio City Budget Work Session - Debt Management Plan, Bond Program, Capital Delivery, and Public Works - September 2, 2026

The meeting convened at 1:06 p.m. on Wednesday, September 2, 2026, and adjourned at 4:26 p.m. City staff presented the debt management plan, the proposed 2027 bond program update, capital delivery performance, and the public works budget. Council members discussed options for bond size, tax rate flexibility, infrastructure needs, and equity.

Discussion Items

  • Debt Management Plan (Troy Elliott, CFO):

    • The city has maintained a fixed debt service tax rate of 21 cents per $100 of assessed value since 2004. This rate generates about 38% of the property tax rate.
    • For the 2027 bond program, a continued fixed 21 cent rate would provide $450 million in bonding capacity under current forecasts (negative 2.7% growth in 2027, flat in 2028, then gradual recovery).
    • Two alternative scenarios were presented using a flexible debt service rate:
      • $1.2 billion bond: Would require an average annual taxable value growth of 4.5% to maintain the 21 cent rate. If growth is slower, the rate could rise to approximately 24 cents, adding about $5.49 per month to the average homestead.
      • $1 billion bond: Would require 3.75% average growth; the rate could rise to 23 cents, adding about $3.57 per month.
    • Sensitivity analysis: Every 1% increase in taxable values above projections generates $165 million in additional capacity; every 1 cent increase in the debt service rate generates $300 million in capacity and costs $1.93 per month on the average homestead.
    • The city's outstanding debt of $2.7 billion in GO/CO/tax notes carries an effective interest rate of 3.11% with an average life of 7.9 years. Total outstanding debt including revenue bonds is $4.4 billion.
    • Staff noted that current debt ratings are prime (AAA/AA+) and that a flexible rate approach is not expected to negatively impact ratings.

  • Capital Delivery Department (Mike Shannon):

    • Created one year ago from Public Works to focus on project delivery. 188 staff members manage 153 active projects.
    • FY26 performance: 82 projects completed or projected to complete by end of September 2026. 2022 bond program progress moved from 49% to 78% of projects complete or under construction; target 87% by end of 2026 and 96% by end of FY27.
    • Improvements include: restructuring into vertical and horizontal divisions, cradle-to-grave project management, improved utility coordination (MOU with SAWS, negotiating similar with CPS), subsurface utility engineering, contractor incentives and responsible bidder scorecards.
    • Capital budget: $317 million ($32M personnel, $285M capital). Proposed 2027 bond timeline: call election February 4, 2027; public vote May 2027.
    • Highlighted projects: new police station in District 3, pickleball courts at Northeast Senior Center, Marbach drainage project, downtown complete street projects.

  • Public Works (Art Reinhardt):

    • Vision to be the premier public works organization. Budget of $326.5 million (12M increase from prior year, mostly for capital). 701 positions.
    • Street maintenance: $130 million for 534 miles (12% of network). Pavement condition indexing updated with six soil-specific degradation curves, showing citywide PCI decline of about 1.9 points. All districts to remain above PCI 70 under new projections.
    • Sidewalk program: $12.8 million for 22 miles (50% gap filling, 40% repairs, 10% trip hazard removal). Sidewalk condition assessment completed: 72% in excellent/fair condition; 1,500 miles of gaps identified (estimated $900M need).
    • Traffic safety: New tactical projects approach using $1 million annual traffic calming program to implement quicker, lower-cost improvements. Updated traffic calming handbook, online application in development.
    • Other programs: vegetation management ($6M), street sweeping (45,000 gutter miles), 12 new traffic signals, school pedestrian safety ($1M for markings and flasher upgrades).
    • Proposed reductions: two vacant positions (senior electronic technician and equipment operator) and elimination of $500,000 for radar feedback signs and flashing stop signs. Fee increases for right-of-way permits (15% plus application increases).
    • New: $400,000 for prima facie speed limit study (CCR from District 7), $300,000 for automated traffic signal performance software (recurring cost)

Key Outcomes

  • No votes taken. The work session was informational for the FY2027 budget and the 2027 bond program.
  • Direction to staff to provide follow-up information by September 30 B-session:
    • Analysis of the impact of proposed TIF (TIRZ) extensions on the debt management plan.
    • A three-year bond option alternative.
    • Breakdown of project delivery times by district and by type (traffic signals, sidewalks, streets, etc.).
    • Comparison of peer Texas cities' bond ratings and variable versus fixed debt service tax rates.
    • Information on how property value growth relates to infrastructure investment.
  • Council members expressed a range of positions:
    • Several members (Castillo, Mungia, Rodriguez, Galvan) supported scenario two or three (larger bond with variable rate) to address deferred infrastructure needs in underserved districts.
    • Councilmember White opposed variable rate, stating the city should maintain fiscal discipline and not raise taxes.
    • Councilmember Spears concerned about cumulative tax burden from multiple entities (city, SAWS, county, schools) and requested a comprehensive view of all tax and fee impacts under different scenarios.
    • Councilmember Alcorta-Gavito was not supportive of increasing the debt service tax rate at this time due to economic pressures on families.
  • Mayor Jones requested a review of TIF extensions' effect on debt capacity and noted the uncertainty of state actions affecting CPS Energy could influence bond timing (potentially a November 2027 election instead of May).
  • City Manager is to provide an updated amendment list by end of the week and a memo on emergency housing rehabilitation.
  • Next bond program discussion scheduled for September 30, 2026.
  • The meeting adjourned at 4:26 p.m.

Meeting Transcript

Good afternoon. The time is now 106 p.m. on Wednesday, September 2nd, 2026, and the City of San Antonio budget work session is called to order. Madam Clerk, please call roll. Councilmember Corps. Councilmember Mickey Rodriguez. Councilmember Via Grande. Councilmember Mungia. Councilmember Castillo. Councilmember Gavar. Here. Councilmember Allerete Gavito. Here. Councilmember Mesa Gonzalez. President. Councilmember Spears. Councilmember White. Mayor Jones. Here. Mayor, we have a quorum. Great. Thanks, Madam Clerk. So today we'll be reviewing the debt management plan, the uh proposed bond program update, uh, capital delivery department and capital budget, as well as public works. Eric, over to you. Yep, Mayor. Uh, so we'll start off with Troy and the debt management plan, then transition to uh Mike Shannon, and then uh and then wrap up with uh art. Good afternoon, Mayor and Council Troy Elliott, Chief Financial Officer. I have the honor of kicking off with the debt management plan. You know, first of all, I'd like to start with um kind of you know what is a debt management plan. You know, at a high level, debt management plan basically governs you know how we manage our debt, how much debt do we currently have, how much can we borrow, um, how we going to pay for that debt, then also how are we going to manage that over time. I think as we go through the debt management plan, a lot of these slides are gonna seem very familiar to you all. We saw them in January. Basically going through kind of the basic building blocks of what a debt management plan is. I think there's value going through that for the viewing public as to give them some context as how we come up with our capacity numbers and things of that nature. First of all, when we talk about the basic building blocks of a debt management plan, what type of debt do we do we actually issue? We've talked about these quite a bit here lately, the general obligation bonds, of course, which will support a 2027 bond program. These are voter authorized, they're backed by property taxes, and the full faith and credit of the city of San Antonio. We also have that are also ad valorant backed, we have our certificates of obligations and tack notes. Certificate of obligations are also backed by property taxes. They are not voter approved. They typically um require a 45-day notice requirement to the public before we can go through and actually issue though issue that debt. They typically have um maturities when 25 to 30 years. Tax notes have a different type of tool that we use in our debt management plan and usually have a shorter duration in terms of maturities. They are also backed by property taxes, they are also not voter-approved, and as I mentioned, they typically have up to a seven-year maturity. Revenue bonds are um backed and pledged by other sources to be, for example, like the airport, and we just issued over $800 million in airport bonds. Those are backed by the airline revenues and by the um revenues generated generated by the airport itself. They are not voter-approved typically, and they're backed by those other revenue sources. And we'll talk about kind of those revenue bonds that we have actually issued and what we have outstanding. When we talk about the the primary assumptions and components of debt management plan, there's really five major pieces of our debt plan. We've talked um quite a bit extensively about our targeted debt service rate of 21 cents.

SUMMARIZED BY OPENPUBLICA AI
TRANSCRIPT VIA PUBLIC VIDEO
openpublica.com