Denton staff presented and the Public Utility Board recommended action related to a Texas Water Development Board (TWDB) financing for the Ray Roberts water treatment plant expansion.

Matt Hamilton (finance) told the board the city previously entered the TWDB financing program and that this agenda item represents the second year of a multi-year financing plan through the State’s SWIFT program. The financing would provide $11,235,000 in principal to fund Ray Roberts treatment plant expansion. Staff said the immediate expansion adds 20 million gallons per day (MGD) of treatment capacity and includes 30 MGD of additional future capacity, creating 50 MGD of new plant capacity and a final combined treatment capacity of 70 MGD once fully built.

Hamilton described the structure as a 30‑year TWDB bond issuance that — after the TWDB’s determination on Oct. 2 — is eligible for a 14% subsidy from state program support. He said preliminary numbers that appeared in the agenda packet estimated 4.1% borrowing cost; with the 14% subsidy established by the TWDB meeting, staff expects an average borrowing cost closer to about 3.32% on the financing. The funds are intended to finance the expansion and will proceed to city council; staff said the city will close and deliver funds on Dec. 3 following council approval.

Why it matters: The expansion increases the city’s treatment capacity for potable water and is being financed through a state program that can provide reduced interest costs compared with a direct municipal issuance. Board members asked several clarifying questions about the subsidy, market rate changes since the preliminary estimate and the timeline; staff said market movement and the newly determined subsidy explain the lower projected interest rate.

Board members had no additional requested changes and the board moved and seconded a motion recommending the ordinance; the vote passed unanimously.

Authorities referenced: staff described the item as a "utility system revenue bond ordinance" using TWDB financing (SWIFT program).