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Crockett approves notices to seek Water Development Board financing for sewer and drinking-water projects
Summary
The joint Crockett City Council and CEIDC approved publication of notices of intent to issue certificates of obligation to pursue Texas Water Development Board funding for an $11.6 million sewer project and a $4.2 million drinking-water project, citing large principal-forgiveness grants and low-interest loans.
Crockett officials voted to publish notice of intent to borrow for major sewer and drinking-water upgrades after a presentation from the city’s financial adviser.
Ben Rosenberg, the city’s financial adviser, told the council the Water Development Board has approved two grant/loan packages: an $11.6 million clean-water (sewer) project with about $7.3 million in principal forgiveness, roughly $3.1 million at 0% interest and $1.1 million at below-market rates; and a $4.2 million drinking-water project with $1 million in principal forgiveness and a $3.2 million low-interest loan. “You’re going to get a low interest loan for the 1.1, 0 interest on 3, and over 7,000,000 of free money,” Rosenberg said during his presentation.
Rosenberg presented pro forma debt-service projections and said the water and sewer fund shows positive operating income over recent years, indicating the city can incur the debt without raising rates now. He described the financing step that night as a notice to the public; the city must publish the notice for two consecutive weeks, wait 45 days, and then return to the council in November to borrow the money and set the loan rates.
City staff stressed that some infrastructure items are under state enforcement and that many plant components are at or past their expected service life. The sewer plant was described as a 2 million gallon-per-day facility with equipment dating to the 1970s; staff said replacements are needed to avoid regulatory penalties and to allow future growth.
Council members voted to approve the resolutions to publish the notices of intent to issue certificates of obligation. That step formally begins the public-notice and waiting-period process required before the city may execute the loans and receive the grant principal forgiveness.
The projects also include asset-management work and possible future rate studies to ensure long-term affordability and replacement schedules; Rosenberg said the board will consider an asset-management plan and a possible future rate study as part of the loan conditions.
Next steps: the city will publish the required notices, observe the 45-day waiting period and return to the council in November to finalize borrowing and set loan rates.
