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Killeen Council approves $37.5 million water and sewer bonds and $3.55 million airport lease bonds
Summary
The City of Killeen held a public hearing and approved ordinances authorizing a $37.5 million water and sewer revenue bond and a $3.55 million combination lease and airport revenue bond. Standard & Poor’s assigned an AA rating and Janney Montgomery Scott and First National Bank submitted the winning bids.
KILLEEN, Texas — The Killeen City Council on June 17 approved ordinances authorizing two bond issues: $37,500,000 in water and sewer revenue bonds and $3,550,000 in combination lease and airport revenue bonds.
City finance staff and bond advisors said the water and sewer issue received unusually strong market interest, drawing 15 bids. Dan Wegmiller of Specialized Public Finance said Standard & Poor’s assigned the water and sewer bonds an AA rating, citing the city’s residential customer base and regional economic role anchored by Fort Cavazos. Wegmiller said the winning bid for the water and sewer bonds came from Janney Montgomery Scott LLC of Philadelphia at a 4.29022% interest rate. The lease/airport bonds drew interest from local and regional banks; First National Bank submitted the winning bid for the airport lease bonds at a 7.62% interest rate.
The council heard that the $37.5 million water and sewer proceeds are budgeted for a package of system projects — staff listed roughly $27.5 million of water projects and $9.5 million of sewer projects — and the airport lease revenue bond will support the GRK office building and is secured by lease and airport revenues. Staff said parts of the water and sewer debt service are already reflected in current rates and that debt service will be included in the FY 2026 budget.
Public commenters urged the council to release full financing details to the public before finalizing the sale. Melissa Brown, who spoke during public comment, asked for clearer disclosure of total interest costs and the effect on residential and commercial rates. Wegmiller said the large number of bids reflected strong market appetite and the winning bids were recommended by the city’s finance team and bond counsel.
The council voted 5–0 to approve the ordinances authorizing sale of the bonds. Councilmember Solomon moved to approve and Mayor Pro Tem Adams seconded.
The council also noted that the airport lease bonds are callable and that the city may pursue refinancing when occupancy and revenues permit. Bond counsel Angela Avila of McCall, Parkhurst & Horton was available to the council during the hearing.
The bonds will require standard closing documentation, and staff said associated debt service appropriations will be reflected in upcoming budget amendments and future budgets.
