La Marque council hears options for nearly $10 million state water loan; no loan agreement yet

The La Marque City Council on Jan. 27 heard detailed options for using a Texas Water Development Board (TWDB) Clean Water State Revolving Fund award of up to $9,985,000 to pay for water-system projects, but council members stopped short of accepting the loan and took no formal vote.

City financial advisers from Stifel Public Finance and the city’s bond counsel described the TWDB award, the steps the council would have to take to accept it, and how the loan might be repaid from water and sewer revenues instead of property taxes.

Why it matters: The TWDB loan is presented as a low-cost alternative to selling bonds on the open market. Advisers said the state program’s rate (about 2.24% in the presentation) could save roughly $1.8 million compared with an estimated market rate of about 4.57% and that payments on the $9.985 million package would be roughly $620,000 a year over 20 years if the city accepts the financing.

Stifel Public Finance told the council the award was granted in December but clarified that the council has not yet entered into any loan agreement. “This council is not entered into a loan for this water project,” the Stifel representative said during the presentation, adding the next steps would include formal council approvals if the city chooses to proceed.

Bond counsel described how the TWDB Clean Water State Revolving Fund operates and why many…