The Tomball City Council and the Tomball Economic Development Corporation (TEDC) took the first steps toward an agreement to fund a new business and industrial park on Holderrieth and Hufsmith-Kohrville roads, as they agreed to issue Certificate of Obligation bonds, which will be TEDC's responsibility to pay back.
"One of the things that city administration and (TEDC executive director) Kelly Violette asked me, was to find a way to fiancé this project to support the business park in a way that was as efficient and cost effective as possible," said the city's bond counsel Jonathan Frels. "One of the mechanisms we have seen work very well in other cities is the process whereby the city issue certificates of obligation, but the actual payments come from the EDC."
Frels went on to say that Tomball and the TEDC have done business this way in the past, with the TEDC paying off bonds from 1999 and 2002.
"It works in situations like this where the type of infrastructure (water, sewer, streets, etc.) that you are planning to put in is city owned," he added.
The proposal that both the TEDC and the city council agreed to, is one in which the city will issue around $8.5 million in bonds and the TEDC will make the payments. The money will go towards developing the property into a business, technology and industrial park, which officials hope will attract numerous new businesses and jobs to the area.
The agreement also calls for the TEDC to hold a specific fund balance of $2 million, in order to assure the city and creditors of their ability to pay back the money.
"It matches what a rating agency would require of the city and we can go to them and tell them 'look, here is what we have'," Frels said.
The council then approved a measure to publicize the intention to issue the bonds. The entire process is expected to be completed sometime in April.