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 members and staff pressed for details on how the city would cover the payment if outside revenues used in the financial plan changed. Shannon Pritchett, the city—s interim city manager, and others explained the historic and projected utility revenues the model uses and said the analysis was prepared to exclude onetime or unstable items in worst-case scenarios. "Without the Republic, we weren't counting the Republic just in the event it could disappear at a moment's notice," Pritchett said, describing how the plan was stress-tested without relying on that contract.

Republic refers to a contract under which the city receives revenue for processing certain third-party waste at the wastewater treatment plant. City staff said the Republic arrangement contributed roughly $722,952 to utility revenues in 2024; council members asked how the city would make a $620,000 annual payment if that revenue source ended. Angst said the fiscal 2023 audited numbers show coverage well above the proposed payment and that unaudited 2024 results looked stronger still once noncash items such as depreciation are added back into the coverage calculation.

Bond counsel Jonathan Frels advised the council on program constraints. "The application sets out what the projects are," Frels said. "There are some limited opportunities to change scope within kind of the general parameters of the project, but not a lot of flexibility because you were selected in a very competitive process for these specific projects you put into the program."

Council debate and next steps: Several council members urged caution because the repayment plan relies on utility-system revenues rather than property taxes. Councilmember Ross said he has pledged not to vote for major debt without voter approval and said he would vote no if he believed the matter should go to a referendum; he nonetheless supported publishing the notice at this meeting. After a short discussion and an amendment to updated calendar dates in the resolution, the council voted 3-2 to approve publication of the notice of intent; the item advances the required 45-day notice schedule toward a potential sale date identified by staff.

Votes at a glance (formal actions and outcomes recorded at the Feb. 24 meeting) - Resolution R-2025-0014: Authorize publication of notice of intent to issue certificates of obligation related to receipt of TWDB Clean Water SRF assistance (project amount shown in staff materials: $9,985,000). Motion: Mayor Pro Tem (mover); second: (unnamed). Outcome: approved 3-2 (Yes: Ross, Yancey, Compion; No: Bill, Lowry). Note: staff provided an updated exhibit with revised dates and bond-counsel guidance on the 45-day publication requirement. - Special election order (Resolution R-2025-0015): Ordered a special election for May 3, 2025 to elect councilmember for District D (unanimous approval). - Professional services agreement: Approved a professional services agreement with the Texas City-La Marque Chamber of Commerce (unanimous approval; council recorded that participation in the chamber serves a public purpose). - Public Safety Building committee: Council authorized the committee to solicit qualifications/proposals from architects to study additional potential police facility sites (motion approved). - Fire engine repairs: Council authorized emergency repairs to a reserve fire engine (repair estimate $38,354.71); motion approved. - Confidentiality acknowledgment: Council adopted a confidentiality/records guidance document for council members (vote recorded as 3 yes / 2 abstain). - Other executive-session outcomes: Personnel interviews for city attorney/prosecutor were continued to the next meeting; council took no action on an item concerning land acquisition at the economic-development director—s request.

What council asked staff to do: Council asked staff to provide more detailed audited and unaudited utility figures, documentation showing the city—s worst-case affordability calculations (explicitly excluding any assumed Republic revenue), and an updated timeline and paperwork for the notice-and-sale schedule. Staff also said they will return with revised ordinance/action language reflecting the dates the bond counsel recommended.

The council—s vote moves the TWDB financing forward in the procedural sense; any final sale or ordinance adoption will be presented at a later meeting after the publication window required by state law has elapsed.

Ending: Council members and staff said they view the project as urgent because of repeated wastewater line collapses and manhole failures reported in the city. Members who opposed or expressed caution said they wanted additional protections for ratepayers and contingency plans if outside revenues decline.