Altus council, municipal authority approve agreement to join Mountain Park groundwater project; adds electric revenues to security pledge

The Altus Municipal Authority and the City of Altus on Monday approved companion resolutions authorizing an agreement with the Mountain Park Master Conservancy District to secure a proposed $15,350,000 promissory note from the Oklahoma Water Resources Board to finance groundwater system improvements.

City officials said the project will rehabilitate wells, tie pipeline segments into the city system and increase Altus’ supply and treated-water quality. Alan Burricks of the Public Finance Law Group, who advised the authority, said the completed project could provide “around 4,000,000 gallons a day” of well water, compared with the roughly “a little over a million gallons” Altus currently gets from ground sources. Staff also told council the city is in violation of DEQ standards for total trihalomethanes (TTHMs) in treated lake water, a driver for seeking additional well water that will be easier to treat.

Why it matters: The agreement changes the city’s debt-security pledge and could raise Altus’ yearly debt-service obligations depending on whether neighboring towns participate. Burricks said the transaction is on the Oklahoma Water Resources Board schedule for its November meeting and, if approved there, would likely close in December when money becomes available to start construction.

Council and authority members discussed the financial implications before voting. Burricks said the borrowing request from Mountain Park is sized on an engineer’s estimate and that the project is scalable depending on final bids. He said if the project proceeds without the other two communities (Frederick and Snyder) the city’s annual payment on the new debt would be about $915,000; if the other communities join, Altus’ share would be about $752,000 per year. Burricks also explained staff’s recommendation to broaden the security pledge beyond water and wastewater revenues to include electric revenues, noting that past pledges had encumbered electric revenues for earlier debt but that obligation has ended.

Council action and amendment: Councilmember Jonathan Bergmark moved to approve the authority resolution and supporting documents; the authority later approved its companion resolution. During the council discussion an additional sentence was proposed to expressly authorize pledging electric revenues as part of the security language; Councilmember Cody Nelson moved to add that language and the council approved the change before voting to adopt the city resolution.

What was decided: Both the Altus Municipal Authority resolution and the city’s companion resolution were approved in open session. The adopted documents authorize execution of the financing documents necessary to close the Mountain Park transaction and contain the pledge language that will include water, wastewater and electric revenues as security for the debt.

Implementation and next steps: Officials said plans and engineering are complete and the financing is contingent on final OWRB approval and bid results. Burricks noted the project can be scaled if bids come in higher or lower than estimates. Councilmembers indicated the city will continue coordination with Frederick and Snyder as those cities consider their own approvals.

Additional details discussed in meeting: • Project borrowing: $15,350,000 (proposed OWRB loan to Mountain Park) • Potential capacity when complete: about 4,000,000 gallons per day of well water • Current ground-water supply: a little over 1,000,000 gallons per day • Estimated annual debt service for Altus if only Altus participates: ~$915,000 • Estimated annual debt service for Altus if Frederick and Snyder also participate: ~$752,000 • Regulatory driver: DEQ TTHM exceedance in treated lake water

The authority and the council adopted the resolutions and authorized staff and legal counsel to execute the documents required to close the financing if the OWRB approves the loan.