La Marque council approves notice of intent for $9.985M Clean Water loan; debates reliance on Republic wastewater revenue

The La Marque City Council on Feb. 24 approved publication of a notice of intent to issue certificates of obligation tied to financing from the Texas Water Development Board(TWDB) Clean Water State Revolving Fund for a wastewater system improvement project totaling $9,985,000.

The action sets the public-notice timeline required before the council can adopt an ordinance to accept the financing and move toward closing. The council approved the resolution 3-2; Councilmembers Ross, Yancey and Compion voted in favor, Councilmembers Bill and Lowry opposed.

Why it matters: Council and staff said the TWDB option offers a substantially lower interest rate than current market alternatives and would bring an estimated $1.8to $1.9 million in interest savings over the life of the loan. Staff and the city—s financial adviser said the loan is intended to fund inspection, repair and replacement work on roughly 10 miles of wastewater collection lines, rehabilitation of manholes and other system upgrades.

Brad Angst of Stifel Public Finance, the city—s financial adviser, told council the TWDB had approved the city—s $9,985,000 project and estimated a TWDB interest rate near 2.24% compared with a roughly 4.57% market rate. "That interest-rate differential is what would provide approximately that $1.8 million of savings to the city if you decide to move forward," Angst said. He estimated annual debt-service payments at about $600,000to $620,000 over 20 years and described the method TWDB and underwriters use to calculate net system revenues available for coverage.

Council member…