Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Infrastructure Finance topic
No spam. Unsubscribe anytime.
Council authorizes water and sewer bonds to reimburse reservoir purchase, build pump station and drill wells
Summary
The council adopted an ordinance authorizing up to $250 million in water and sewer revenue bonds and approved a $60M first tranche to reimburse the recently purchased reservoir, fund a master pump station and 36" raw water main, and finance drilling of new production wells; repayment sources include irrigation and water/sewer rate adjustments.
City Council authorized a package of water and sewer revenue bonds Aug. 6 to finance and reimburse multiple water utility capital projects, including costs already incurred for a recently purchased reservoir and the design/construction of a master pump station and raw water transmission main. The council adopted the enabling ordinance authorizing up to $250 million in aggregate water/sewer revenue bonds and then approved a bond resolution to issue a first tranche (estimated $58.3M principal plus premium, net project proceeds ≈ $60M) to fund the reservoir reimbursement, a pump station and 36‑inch raw water main, and drilling and construction of 10 new production wells in the northeast planning area.
Why it matters: the financing will accelerate critical water supply and transfer infrastructure that the city identified in recent rate and capital planning work; staff presented repayment plans tied to irrigation rate increases and water/sewer rates adopted in a recent rate study.
Financial and schedule highlights: finance staff estimated an all‑in true interest cost of about 5.03% for the tranche being priced now, with debt maturing in 2055 (30‑year term) and roughly $3.9M in average annual debt service for the tranche. The city plans multiple tranches over the next 12 months, matching bond issuance to project timelines; staff noted potential refunding opportunities for callable 2015 water/sewer bonds and will monitor market conditions for additional net present value savings before refunding.
Repayment sources: costs for the reservoir reimbursement will be repaid in part by an approved increase to irrigation rates (an additional $3.90 per month for ~65,256 irrigation accounts was cited to generate roughly $3M annually). The pump station and raw water main will be repaid through water and sewer rates as set in the recent rate study; wells will be repaid through water rates under the same plan.
Next steps: staff will seek bond ratings, publish offering documents and price the bonds in late August with an anticipated closing in mid‑September for the first tranche. Council will receive additional resolution/closing documents prior to each issuance.
