The Dallas City Council is set to vote Wednesday on a new short-term borrowing program that city finance staff say would cost less to run because it would lean on the city's own credit rating instead of a bank's.
The ordinance, added to the Oct. 14 agenda as item 30, would create a General Obligation Extendable Commercial Paper Program that could carry up to $350 million in notes outstanding at any one time. It would replace the city's current commercial paper program, which expires in November.
What the program does
According to the City Controller's Office, Dallas uses commercial paper to award contracts under Sections 9 and 10 of the City Charter and as interim financing for capital projects. Short-term notes are issued to match the timing and size of contract awards, then periodically paid off by refinancing into long-term debt.
Staff say the new program would serve as a source of appropriation authority and low-cost capital for the general obligation capital improvement plan, in line with the adopted 2026-27 budget.
The city's past programs, the briefing says, were backed by letters of credit from highly rated banks that charged "hefty fees." The extendable version is supported by Dallas' own credit rating and needs no bank letter of credit, which staff say lowers the overall cost. Costs are incurred to set up the program and afterward only when notes are actually issued.
Who would handle it
The city's co-financial advisors, Hilltop Securities and Estrada Hinojosa & Company, recommended the program and the use of two dealers given its size. After a request for proposals the Office of Procurement Services issued April 30, evaluators picked Wells Fargo Securities for $200 million and JPMorgan Securities for $150 million. U.S. Bank Trust Company was selected in an informal bid as issuing and paying agent.
