Weatherford council votes to publish notice for up to $80 million certificates of obligation for water and wastewater projects
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Summary
The Weatherford City Council approved publication of a notice of intent to issue up to $80 million in certificates of obligation to fund water and wastewater infrastructure; staff said utility revenues will repay the debt and the city will return in June for final authorization. A resident raised concerns about city debt and transparency.
The Weatherford City Council voted to publish a notice of intent to issue up to $80,000,000 in certificates of obligation to fund water and wastewater projects, council members approved the item after a staff presentation and a public comment critical of the size and public outreach.
Don Brooks, chief financial officer for the city of Weatherford, told the council the notice would be the first step in a two-step process and that the proposed issuance would allocate about $55,000,000 to water improvements and $25,000,000 to wastewater improvements. Brooks said the city’s current utility rate structure “was specifically designed to accommodate the debt service for these certificates.”
Marty Shue, a financial adviser with Hilltop Securities, told the council that certificates of obligation (COs) are a form of general-obligation-style debt and that, while the bonds have an underlying ad valorem pledge, the city intends to repay them from utility revenues. Shue said preliminary estimates put the expected true interest cost in a range of “4.2 to 4.5%” and that the council would see final pricing and an ordinance when it returns in late June.
During public comment Lynn Baber, a Weatherford resident, criticized the size of the city’s planned borrowing and the level of public outreach. “It’s a lot of money,” Baber said, and told the council she was “very disappointed in the level of respect that the citizens of Weatherford are receiving on this item” compared with past public processes.
Brooks and Shue said publishing the notice is a required legal step that does not obligate the city to issue the full $80 million; if the council decides to proceed it will approve the final issuance later this summer. Council members then moved and approved the resolution to publish the notice as presented.
Council members who moved and seconded the motion were Mayor Pro Tem Wilder (motion) and Luke Williams (second). The agenda packet, Brooks said, includes the project list describing proposed uses; staff noted the issuance of COs does not require voter authorization.
The city will publish the notice on the schedule required by law and return to the council with pricing and a proposed ordinance for final approval later in June.