Heath Council approves notice of intent on $40.5M Water Bridge Plan financing
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Summary
Council approved a plan of finance and a resolution to publish a notice of intent to issue certificates of obligation to fund the Water Bridge Plan, a $40.5 million package that includes an elevated storage tank, ground storage tanks, reimbursements for well No. 1 and wells 2–4. Staff and advisors will finalize call features and pricing ahead of a targeted March sale.
The Heath City Council voted unanimously Feb. 4 to publish a notice of intent to issue Texas certificates of obligation to fund the city’s Water Bridge Plan, approving a plan of finance and directing staff to proceed with public notice and next‑step preparations.
Hilltop Securities Managing Director Jim Sabonis told the council the Water Bridge Plan requires about $40.5 million for projects including the design and construction of an elevated storage tank (estimated at $14.5 million for the Heath Golf & Yacht Club site), a ground storage tank design ($750,000), a shared ground storage tank with the City of Rockwall ($3.7M plus a restrictive valve), reimbursement of $1 million for Well No. 1, and funding for wells 2–4. "Your water bridge plan requires $40,500,000 of capital improvement plan," Sabonis said.
Sabonis and staff recommended a 20‑year debt structure to minimize immediate rate impact while retaining the ability to refund earlier if market conditions improve. He described a not‑to‑exceed sale process with a target competitive sale pricing on March 24 and an expected closing around mid‑April, subject to Attorney General review for the required proceedings.
Council and the finance board identified the bond call feature (the earliest date bonds can be refunded) as an item for final committee review during the notice period. Councilmember Scott Dodson moved to approve the plan of finance and resolution directing publication of the notice of intent; Councilwoman Cindy Horn seconded. The motion passed on a formal roll call with all members voting yes.
The vote followed a broader discussion of phasing and whether certain projects could be delayed or split across later issuances to reduce rate pressure. City staff said they can reduce the requested issuance amount before sale if appropriate, and the finance committee will continue analysis on call features and project phasing ahead of pricing.
Next steps: city staff and bond counsel will publish the notice of intent, finalize an offering memorandum, present the full sale terms at the March meeting if necessary, and coordinate with the rating agencies and bond counsel through the Attorney General review process prior to closing.
