Council authorizes $25.31 million certificates of obligation for facility energy projects and generators; effective rate 4.386%

The Abilene City Council authorized the issuance and sale of certificates of obligation to fund energy improvements at city facilities and to purchase generators for water treatment plants.

Marjorie Knight, the city's director of finance, told the council the financing will support energy improvements and generator purchases. She said an estimated $10,000,000 would be supported by property tax revenue and $15,000,000 would be supported by water and sewer revenues. Knight later provided final figures in the presentation: the issue was structured with an approximate par amount of $25,310,000 and total project proceeds of $26,488,230.

George Williford of Hilltop Securities, the city's financial advisor on the sale, said the certificates were marketed the day before the council meeting and investors provided premium dollars that reduced the net issue size. Williford said both rating agencies affirmed existing ratings and the effective interest rate on the issue was 4.386%.

City staff presented the expected annual debt service at roughly $2,009,000 per year, split as about $807,000 for property tax supported debt and about $1,204,000 for the water and sewer portion. Marjorie Knight told council that the water and sewer fund "generates enough revenues to cover this, so not at this time" in response to questions about raising water rates.

Members of the public asked clarifying questions about what projects are included and whether the financing would increase property taxes. Tammy Fogel, a resident, asked for clearer public communication about certificates of obligation and how they may affect tax bills. Another resident asked whether generators were essential given earlier storm planning; council members said generators are part of a state‑mandated response and necessary to maintain water pumping during grid failures.

Councilman McAllister moved to approve the ordinance authorizing the issuance and sale of the certificates; Councilman Yates seconded. The council voted and the motion carried; all members present voted yes.

Council staff said the project is the final phase of an eight‑year modernization and preventive‑maintenance initiative for city facilities and that the water plant generators address vulnerabilities exposed during winter storm events. They said the certificates were structured to realize investor premium and that the sale's financing terms were consistent with market conditions.