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Bandera council approves TWDB principal-forgiveness agreement and authorizes $3 million certificates for wastewater project
Summary
The council approved a principal-forgiveness agreement with the Texas Water Development Board totaling $1.4 million in grant funds and authorized issuance of $3 million in certificates of obligation to fund wastewater system improvements; a $2 million 0% loan also forms part of the financing plan.
The Bandera City Council approved a principal-forgiveness agreement with the Texas Water Development Board that provides $1,400,000 in principal forgiveness and a related $2,000,000 0% interest loan to support planning and acquisition phases of a wastewater treatment project.
Ben Rosenberg, the city's financial adviser, told the council the project was structured to maximize grant funding by splitting work into planning, acquisition and design first and postponing construction to a later application cycle. Rosenberg said the group has secured $1,400,000 in principal forgiveness and a $2,000,000 zero-interest loan, with loan payments not required until February 2026 and a possible 30-year repayment schedule thereafter.
City staff and bond counsel said the agreement requires standard closing steps. The council approved the resolution authorizing execution of the principal forgiveness agreement and related documents in a roll-call vote; the transcript records multiple yes votes and two absences. Staff indicated the TWDB funds would be placed in escrow and that January 10 was the targeted date for escrow funding so work can begin.
Separately, the council approved Ordinance No. 449 to authorize issuance of Combination Tax and Surplus Revenue Certificates of Obligation, Taxable Series 2025A, in the principal amount of $3,000,000. City bond counsel explained the certificates are secured by ad valorem taxes and a pledge of surplus water and sewer revenues and must comply with state notice and disclosure requirements. The ordinance and the TWDB financing are being used together to support the wastewater project’s funding plan.
The council discussed how existing water-system revenues would support debt service and heard that the chosen structure seeks to minimize the city’s cash outlay while achieving needed improvements. Council approved the ordinance and related resolutions by roll-call votes during the meeting.
What’s next: staff will complete closing paperwork with bond counsel and the TWDB and move funds into escrow; construction-phase financing will be revisited in a later application cycle.
