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Loveland council approves $95 million in water and wastewater borrowing on first readings
Summary
On first reading the council approved tax-exempt revenue bond authorizations: up to $45.5 million for the water enterprise and up to $50.5 million for wastewater, with staff citing capacity, lead-line replacement and aging infrastructure as drivers.
The Loveland City Council on Tuesday approved on first reading three ordinances authorizing tax-exempt revenue borrowing for the city’s water and wastewater enterprises. Staff described the borrowing as necessary to fund major capital projects, meet regulatory requirements and avoid higher future costs from inflation.
Staff requested authority to issue up to $45,500,000 in water enterprise revenue bonds (maximum interest not to exceed 5.25 percent, 30-year maturity) and up to $50,500,000 in wastewater enterprise revenue bonds on similar terms. City staff highlighted key projects expected to be funded by the proceeds: lead-service-line inventory and replacement (to comply with EPA lead-and-copper rule revisions), relining a 36-inch water transmission line, AMI (advanced metering infrastructure) rollout, Taft Avenue waterline replacement, and water-treatment reservoir oxygenation. For wastewater the largest single project is a capacity expansion at the Water Reclamation Facility (WRF) plus plant rehabilitations and a new 36-inch interceptor down East First Street.
Finance staff and municipal advisors presented affordability measures: with the proposed borrowing, projected debt-service coverage ratios remain well above common municipal thresholds. Staff reported water enterprise coverage of about 1.83x and wastewater coverage of about 2.14x after the proposed issuance. Maximum annual debt service figures were presented to the council (roughly $3.75 million for water and $4.15 million for wastewater under the authorization). Staff emphasized the bonds are limited obligations of each enterprise and are payable solely from enterprise revenues; no general-fund tax revenue will be used to pay the debt service.
Public comment included homeowners and homeowners’ association representatives who described experiences in metro districts and urged transparent budgeting and limits on financing structures. Utility commission members had reviewed and recommended the borrowing.
Decisions: Council approved the ordinances on reading. Subsequent steps include publication of the official offering documents, a planned competitive sale in late July and a scheduled close in early August. Final bond sale timing and interest will determine the exact annual payment schedule.
Roll-call votes: Water enterprise ordinance approved on first reading 8-1 (Councilor Black recorded a no vote). Wastewater enterprise ordinance approved on first reading 8-1 (Councilor Black recorded a no vote).
