Keene Council keeps $3.16 million TWDB water grant, rejects high‑interest notes and borrows $355,000 from reserves

The Keene City Council on Tuesday accepted a $3,160,000 grant from the Texas Water Development Board for water system improvements and voted to decline issuing $385,000 in combination tax and surplus revenue certificates of obligation to fund the city’s required match.

The council instead approved borrowing $355,000 in surplus cash to satisfy the local share, with direction that the amount be covered 60% from the water/sewer fund and 40% from the general fund. Financial adviser Jim Sabonis told the council the grant and local funding decision were “tremendous success.”

Sabonis had told the council the grant package covers most project costs and that the certificates were put on the agenda only to close an earlier public notice required when the city considered debt. The council first moved to vote against issuing the certificates and then made a separate motion to fund the local share with surplus cash; both motions passed on recorded voice votes.

City Manager Jonathan Seitz told the council the cash will be treated as a temporary borrowing and repaid through future budgets. “The goal here is the keyword is borrow and I just want the public to know this. You know, our our plan is to pay the money back and work that into the budget,” Seitz said.

Council members debated procedure before voting. The city attorney advised that formal council action was needed to close the earlier debt notice; Sabonis and staff said creditors were not being pursued once staff determined the city had cash on hand.

The council’s decision removes what would have been a small new debt service burden and accelerates moving grant‑funded water improvements into construction, pending project schedules and TWDB procedures.