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Denison council approves ordinance to issue certificates of obligation for $16.95 million water-system project

City of Denison City Council · December 16, 2025

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Summary

Council authorized issuance of $5,085,000 in certificates of obligation to meet a 30% city match for a $16.95 million water-system improvements project funded in part by an $11.865 million TWDB grant; adviser said the true interest cost is about 2.8% amortized over 30 years.

The Denison City Council voted to approve an ordinance authorizing issuance of the city's combination tax and revenue certificates of obligation (series 2026-TWDB) to provide the city's 30% match for a Texas Water Development Board (TWDB) water‑system improvement program.

Public works staff told the council the total project cost is $16,950,000, with a required city match of 30% ($5,085,000). The remaining $11,865,000 was described in the meeting as grant funds from the TWDB. Staff said the city's match will be funded from hotel/occupancy (accommodation) tax revenue, surplus revenue and certificates of obligation.

Martie Hsu, the city's financial adviser from Hilltop Securities, explained the financing mechanics: TWDB will be the sole purchaser of the debt, the TWDB portion includes subsidized interest rates, and the city's estimated true interest cost (TIC) for the certificates is about 2.8% amortized over 30 years. Hsu said there is some principal deferment to allow the city time to ramp up revenue collection and that the city would receive the TWDB funds on January 20, according to the presentation.

Councilman Thomas moved to approve the ordinance authorizing issuance of the certificates of obligation; Councilman Massey seconded and the motion carried unanimously.

The project as described aims to reduce water loss across the system; adopting the ordinance was the final step in the TWDB bond issuance process described by staff and the financial adviser.