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Mineral Wells approves $68.7M in certificates of obligation and a $10M TWDB grant to fund water system upgrades

City of Mineral Wells City Council · February 4, 2026

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Summary

Council authorized Series 2026A ($19.9M tax‑exempt) and Series 2026B ($48.78M taxable to TWDB) certificates of obligation and approved a $10 million principal‑forgiveness grant from the Texas Water Development Board to pay for Hilltop Water Treatment Plant upgrades, raw water intake, pump station and transmission line work; the open‑market sale priced at a 4.29% true interest cost.

The Mineral Wells City Council voted Feb. 17 to move forward on a multi‑part financing package to fund major water‑system improvements.

Staff presented two certificate‑of‑obligation issues: Series 2026A, an open‑market tax‑exempt sale totaling $19,908,847.60 (with $18.5 million deposited to the project fund) and Series 2026B, a taxable issue of $48,780,000 to be marketed and sold to the Texas Water Development Board (TWDB). In addition, the city accepted a $10,000,000 principal‑forgiveness grant from TWDB to offset project cost; staff said the grant requires no repayment.

City officials said Fitch assigned a AA‑ (double A minus) rating to the transaction, and the open‑market sale priced at a 4.29% all‑in true interest cost. Under the proposed financing, the city expects total annual debt service for the issues to be roughly $3.8 million per year. Staff said the 2026B structure takes advantage of TWDB‑subsidized rates to lower the city’s borrowing costs.

Council approved the ordinances and resolutions authorizing the issuance, sale and related account setup by recorded or voice votes. The council also authorized the creation of three construction accounts and appointed signatories to hold proceeds as required by bond documentation.

City staff and bond counsel emphasized the need to maintain timely audits and to file required ongoing disclosures (MSRB) following the issuance. The first coupon on the tax‑exempt issue is scheduled for Feb. 1, 2027, and final maturities for the series were presented in the council packet.