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Port Arthur to apply for $16.5M state revolving fund loan for water-line replacement; finance director to clarify debt-covenant note
Summary
Port Arthur authorized submission of a Texas Water Development Board application for up to $16,500,520 in DWSRF funds for a water-line replacement project.
The City Council authorized staff on Aug. 12 to submit an application to the Texas Water Development Board (TWDB) for a State Revolving Fund (DWSRF) award of up to $16,500,520 to support a water-line replacement project.
What staff said: City staff described this application as the construction-phase funding step for a project with design work dating to 2019. The TWDB program can provide loans with partial principal forgiveness (the presentation said up to 30% forgiveness may be available) and the rest as a loan; staff said they will need to submit audits, financial data and other documentation as part of the TWDB review.
TWDB letter and debt-covenant note: The TWDB letter included a caution: "TWDB records indicate that one or more issues of debt covenant non-compliance presently exists with your organization and could affect the ability to successfully apply for and receive funding." Finance Director Lynn Boswell told council she was not aware of any unpaid debt obligations and that the city has been paying debts on time; she said she would follow up and report back with clarification.
Why it matters: The proposed work would address the city's water-line infrastructure and could be partially subsidized via principle forgiveness. Approval of the application does not obligate the city to accept loan terms until funding is awarded and any required budget appropriation would be presented later.
Council direction and next steps: Council approved the resolution to submit the application and asked staff to clarify the TWDB note about potential debt-covenant noncompliance. Staff said TWDB will review documentation during its process and that the application requires submission by the August deadline; if awarded, the city would need to accept loan terms and appropriate funds as required.
Ending: Council approved submission of the application; staff will seek TWDB clarification on the debt-covenant statement and report back to council as needed.
