Decatur council hears plan for roughly $31.5 million bond package for water, wastewater and fire station

City Manager Nate Mara told the Decatur City Council that staff has narrowed a proposed certificate-of-obligation package to about $31.5 million, focused on water and wastewater projects and construction of Fire Station 2.

Mara said the package was reduced from an earlier maximum figure and described it as two principal groupings: a public-safety package near $21 million and a public-health/utilities package of roughly $10.05 million. "We pulled it down from 35 or 65,000,000 down to 35,000,000," Mara said, adding that the figures presented were preliminary and that "these are rough numbers." The council indicated informal support to proceed to bond counsel and municipal advisors.

The plan and why it matters

Mara framed the package as necessary to support infrastructure and public-safety needs tied to Decatur's recent growth. The water and wastewater portion includes engineering and 30% design fees to advance three major projects: North Decatur gravity sewer line engineering ($413,000), a 1 million-gallon-per-day (MGD) wastewater treatment plant 30% design ($4,100,000), and a 3 MGD water treatment-plant expansion 30% design ($1,800,000). The public-safety portion covers land and construction management fees and the new Fire Station 2 construction, plus rehabilitation of Fire Station 1 and site demolition of the old police facility.

Supporting details and prior steps

Mara reminded the council that earlier approvals put project partners and initial contracts in motion: the council previously approved a guaranteed maximum price for Fire Station 2 just under $16,000,000 and a professional services agreement of just under $400,000 with Fitzpatrick. He said the $31.5 million figure is the recommended package for the next issuance once issuance fees are added.

Funding, impact fees and tax scenarios

Mara said the city expects to apply impact fees to much of the water and wastewater debt. He said the current impact-fee fund balance is about $1,500,000 and that using impact fees could reduce the tax-secured portion of the new debt to roughly $1,200,000. He gave two growth scenarios to illustrate potential tax effects: if 100 new homes are built in the next year, the tax implication for this package would be about 6.5 cents; if 200 homes are built, the implication would be closer to 3.5 cents. He noted the numbers remain estimates until bond counsel and the city’s financial advisers finalize figures.

Timing and next steps

Mara said the debt is being conceptualized to land in the fiscal year 2027 budget and that the city expects most construction activity in calendar years 2025–2026. He asked councilmembers whether to proceed to bond counsel and municipal advisers; council members indicated informal agreement (heads nodding). Mara said bond counsel and municipal advisers will return with firm issuance numbers and the schedule for required public hearings and advertising.

Site activity and project phasing

Mara also reported that the Fire Station 2 site on Old Reunion Road is active and that clearing and grading are underway from prior budgeted funds. He described the presented work as 30% design or engineering fees that will move projects into subsequent construction phases.

What was not decided

Council gave no formal vote on issuing bonds at this meeting; the discussion was an update and direction to proceed with next steps, including engagement of bond counsel and municipal advisors. Final debt issuance, the tax rate implications, and any formal bond authorization will return for future council action.

Ending

Mara and staff will return with firm numbers after bond counsel and municipal advisers complete their work. Councilmembers said they were appreciative of staff’s approach to phasing infrastructure work to manage local growth.