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Council approves roughly $45 million sewer and water bond sale; staff flags $6.39 monthly regulatory fee increase
Summary
Council approved moving forward with a roughly $45 million water and sewer revenue bond sale tied to an EPA consent decree; staff reported a potential $6.39 per-customer monthly regulatory compliance fee increase to help cover costs and presented bid results showing a 4.75% winning rate.
The Tyler City Council on June 11 approved financing steps for about $45 million in water and sewer revenue bonds intended to fund projects tied to the city’s EPA consent decree, and staff outlined a possible regulatory compliance fee increase of about $6.39 per customer per month to cover the program costs.
City staff summarized an estimated project package totaling $45,825,294 that includes: capacity improvements ($14,500,000), private lateral repairs ($1,000,000), Group 3 repairs ($3,100,000), Group 4 ($1,600,000), Group 5 ($3,700,000), Group 6 ($8,300,000), Group 7 ($783,000), creek crossing repairs ($1,000,000) and lift-station work ($11,500,000). Staff said excess needs would be covered from prior bond funds.
Paul Jason of Specialized Public Finance presented the results of a competitive sale held the previous day. He said six bids were received and Mesirow Financial submitted the winning bid with a true interest cost of 4.75 percent. Paul Jason said the city’s debt rating was affirmed at AA during the rating process and that, if approved, bond closing is planned for July 9.
Staff also said the regulatory compliance fee will need to be increased by an estimated $6.39 per customer per month; the fee is intended to address costs tied to regulatory compliance under the consent decree. When asked how the $6.39 would affect total monthly charges, staff said it would be added on top of existing fees; an example referenced in the meeting indicated the combined total would be approximately $23.20 per month but staff said final budget decisions and potential phasing would be considered in the regular budget process.
A public commenter, Latonya Gaston Bell, spoke on behalf of residents raising concerns about water-billing errors and late or mis-sent bills; she provided an address for the resident and asked staff to follow up. Council asked staff to have water department personnel contact the resident.
Council moved and approved the financing measure; staff said bond counsel will seek attorney-general approval and proceed to closing on July 9 if all is in order.
