El Campo council limits bond authorization to wastewater project, approves bid award for wastewater treatment plant

The El Campo City Council held extended discussion on Feb. 24 about issuing debt to construct a new public works facility and separately about financing a wastewater treatment plant. After debate over scope, cost and whether the public should vote on a large debt issuance, the council approved a narrower financing step for the wastewater project and then awarded the construction contract for that plant.

Staff presented three financing options in a notice-of-intent (NOI): Option A would issue certificates of obligation for the wastewater treatment plant only ($1,685,000); Option B would combine wastewater and an expansion of the existing house (keep house and add on) totaling $4,185,000; Option C would combine wastewater with demolition of the existing house and construction of a new public works building ($4,685,000). Staff said the public works facility alone could cost in the $2.5–3.5 million range depending on scope and site work but that prices and scope were not yet final.

Council members expressed a mix of views. Some said the proposed public works facility felt "half baked" and urged a fuller scope (equipment parking, mechanical spaces) and more precise local cost estimates; one council member said the $3.5 million figure felt premature and argued a public vote would be appropriate for major debt. Other council members said the project is needed and that, if the city receives FEMA funds or recovers insurance, those funds could be used to reduce the debt or prepay principal. Bond counsel and a financial adviser in the audience explained typical market features, including standard call provisions and that private placements can offer more flexible early‑prepayment options but often at higher interest rates.

After the discussion the council considered the NOI options. Councilman Hodges moved to approve Option A (the wastewater treatment plant only, $1,685,000); the motion was seconded and the council voted to proceed with Option A. The mayor announced the motion passed; the transcript records one council member voting opposed to the motion.

With the NOI authorized for the wastewater project, staff returned later in the meeting with bids for the wastewater improvements. City engineering staff recommended awarding the construction contract to BCI Water Resources Inc., which submitted the low bid of $1,595,000. Staff said four bids were received and that the low bid was lower than expected given prior price volatility. A council member moved to award the contract to BCI Water Resources Inc. in the amount of $1,595,000; the motion was seconded and the council approved the award.

City staff explained that although the council must authorize financing before awarding a bid in typical practice, the motion to authorize the NOI for the wastewater project provided the funding commitment required to proceed with bid award. Staff also noted that issuing both projects together could save issuance costs (estimated in the tens of thousands of dollars) but that combining them would increase the total principal and could affect tax and utility rate impacts. Staff said Option A could be financed from utility funds without increasing the tax rate; combined options would require some general-fund contribution and could increase taxes.

Council asked staff to return with additional, more detailed cost estimates and options for construction management methods (including construction manager at risk) if the council seeks a different approach or scope. The city will proceed with the wastewater project under the authorized NOI and with the awarded construction contract to BCI Water Resources Inc.