Levelland approves $5.2 million certificates of obligation to fund citywide water-meter replacement; approves $1.71 million reimbursement to contractor

Levelland City Council on Feb. 3 voted to issue limited-pledge revenue Certificates of Obligation Series 2025 to finance a citywide water-meter replacement project and approved a $1,708,710.66 payment request to Ameresco as reimbursement for work already completed.

City Manager Michael Stewart told the council the project has been under discussion since last October and described the certificates as supporting replacement of “all of the water meters in town.” He said staff and outside advisors compiled the finance documents and that Standard & Poor’s affirmed the city’s A+ credit rating during the process: “We stayed at an A plus, which speaks volumes,” Stewart said.

Why it matters: New, wireless meters are intended to improve the city’s ability to manage the water system and give customers more control of usage and billing. A sample meter study last year suggested older meters were under-registering usage; Stewart said the city expects recovered revenue from more accurate meters to help repay the debt.

Details of the sale and ordinance: Robert Spears of Hilltop Securities said the council’s December notice of intent listed a maximum par amount of $5,975,000 and that the actual par amount sold came in “at about $5,200,000.” He told the council the pricing reduced the city’s interest cost from the earlier estimate; the sale priced at a 3.99% interest rate and Spears summarized the city’s final annual cost estimate as roughly $513,000. The council adopted Ordinance No. 1089, an 81-page document authorizing issuance and related sale documents; the ordinance permits a single reading under statute.

Payment to contractor: The council then considered a payment application submitted by Ameresco under the contract approved in October 2020. City staff explained the ordinance includes a reimbursement provision allowing the city to pay project invoices now and then reimburse itself when bond proceeds arrive. Council members were told bond proceeds are expected in late March or early April and that staff will temporarily draw funds from existing accounts to cover the payment until reimbursement is received. The council approved payment application No. 2 for $1,708,710.66 to Ameresco.

Procedural notes and next steps: The council approved the ordinance by voice vote; the motion carried with no roll-call tallies recorded in the public transcript. Staff will complete the administrative closing of the bond sale, execute paying-agent and registrar agreements, and issue the official statement required for the Certificates of Obligation. The first customer mailings about the new meters were described as beginning the week after the meeting, and the city indicated contractors will begin meter installations in March.

Quotes: “This project before y’all … is to replace all of the water meters in town,” City Manager Michael Stewart said. “Back on December 16, council adopted a notice of intent to issue these, the max par amount … was $5,975,000 I believe and the final par today came in at about $5,200,000,” Robert Spears of Hilltop Securities said.

What the council did not decide tonight: The ordinance authorizes issuance and related documents; the transcript does not record a line-item roll-call of council votes or any change to the financing structure beyond the sale pricing the same day. The city did not provide a final amortization schedule in the meeting record; staff said the official statement and closing documents have the detailed terms.