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Tyler council hears plan to issue about $45 million in revenue bonds for sewer, water compliance projects
Summary
The Tyler City Council on a May meeting received a presentation on a proposed issuance of about $45,000,000 in revenue bonds to finance regulatory-compliance water and sewer projects tied to an EPA consent decree.
The Tyler City Council on a May meeting received a presentation on a proposed issuance of about $45,000,000 in revenue bonds to finance regulatory-compliance water and sewer projects tied to an EPA consent decree.
Keidrick, a city staff member who introduced the item, told the council the bond proceeds would fund projects including multiple project groups, creek crossings and lift stations and that the city expects to increase a regulatory compliance fee next budget year to help pay debt service. "That fee, we're kind of estimating, will be somewhere in about the $7 a month per customer," Keidrick said.
Paul Jason, of Specialized Public Finance, the city's financial advisor, said the planned issue would mirror the structure of a 2023 utility issue, run about 30 years and is expected to receive a double-A rating. Jason estimated a likely interest rate in the mid-to-upper 4 percent range — roughly 4.9 percent in his projection — and said the city has a cushion of about 20–30 basis points compared with comparable recent deals. He outlined a timeline in which the council would be asked to authorize moving forward, the rating meeting would occur the following week, bids would be taken June 10–11, and closing would occur in early July.
Jason said estimated debt-service coverage would remain around 1.4–1.5 times in the near term, a level he described as important to preserve the city's credit rating. He added the first interest payment would be March 2026 and principal payment in September 2026, which will be part of the next budget cycle.
Will Smith, Jason's colleague at Specialized Public Finance, attended but did not present detailed remarks during the public discussion.
No formal council motion was made during the presentation; staff asked for general guidance and said they would return to council with bond documents and bids for formal action on June 11.
The council did not adopt any bond authorizing resolution at the meeting; the presentation served to inform the body and request direction to proceed with the financing process.
