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Council directs publication of notices to issue certificates of obligation for water improvements totaling up to $69M across two tranches
Summary
Council approved resolutions to publish notices of intent to issue certificates of obligation: up to $49 million (first tranche) and up to $20 million (second tranche) to help fund Hilltop Water Treatment Plant improvements, a new raw‑water intake, pump stations and transmission lines; staff said $10 million of the project will be grant‑forgiven under a TWDB program.
The council approved resolutions directing publication of notices of intent to issue certificates of obligation for water system improvements in two related transactions. Staff said these steps are required to proceed with financing associated with the city’s Texas Water Development Board (TWDB) Drinking Water State Revolving Fund (DWSRF) loan application.
Staff summarized the financing package and project scope: improvements to the Hilltop Water Treatment Plant, a new raw water intake, pump stations and transmission lines and related engineering, legal and fiscal costs. The city applied for roughly $77.5 million in loans; staff said $59 million was the financing portion associated with TWDB, of which $10 million will be forgiven through a federal grant program, leaving $49 million to issue in the first tranche.
For the first resolution (up to $49 million), staff described a preliminary structure of 42% taxable and 58% tax‑exempt debt, a 30‑year length with final payment in 2055, and estimated interest ranges for the taxable portion (3.16%–4.85%) and tax‑exempt portion (1.66%–3.35%). The council approved publication of the notice of intent by roll call (ayes recorded for Mayor Johnson, Kyle Kelly, Lynn Mitchell, Jonathan Rusher, Charles Ramsey and Beth Watson). Staff noted the city must post the notice continuously for at least 46 days under state law.
For the second resolution (up to $20 million), staff said this tranche would be 100% taxable, also 30 years, with an interest estimate around 5.25% and annual debt payments roughly $1.43 million. Staff explained closings for market and TWDB transactions would be about two weeks apart and that proceeds will be placed in interest‑bearing accounts subject to IRS arbitrage rules; any excess interest over the permitted yield would be rebated to the IRS.
Council approved both resolutions by roll call; the transcript records unanimous ayes of the members present. The meeting record also notes one council member absent (the transcript records the absent member’s name inconsistently in two places).
