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Harlingen commission approves first reading of $10 million waterworks bond package
Summary
On first reading the Harlingen City Commission approved an ordinance authorizing $10 million in waterworks and sewer revenue bonds via the Texas Water Development Board SRF program, a deal city advisers say will lower the true interest cost to about 2.557% and save roughly $2.4 million over the loan life.
The Harlingen City Commission on first reading approved an ordinance authorizing $10 million in Waterworks and Sewer System revenue bonds intended to fund improvements to the city’s water system.
Ann Berger Entrekin, the city’s financial adviser, told the commission the bonds would be issued through the Texas Water Development Board Clean Water State Revolving Fund and carry a projected true interest cost of about 2.557% after a 40% SRF subsidy. “We project that’s gonna save over $2,400,000 because of the fact that this is a subsidized program,” Entrekin said.
City staff said the bonds are secured only by water-system revenues and carry no ad valorem pledge. Berger Entrekin also outlined the transaction’s sources and uses, noting a project fund deposit of roughly $9,720,000 and cost-of-issuance items totaling about $107,005.
During deliberations commissioners pressed staff on timing and contract language. Commissioner (speaker 3) sought clarifying amendments to define the Texas Water Development Board’s “executive administrator,” require that a merging paying bank notify the city, and change the venue clause from Travis County to Cameron County. Berger Entrekin agreed to coordinate those technical edits with bond counsel.
Commissioners moved to approve the ordinance on first reading with the suggested amendments; the motion passed by voice vote. The ordinance’s caption and required documents will be updated before the next reading.
If adopted on second reading, city staff said the bonds would be advanced via the SRF program to fund the approved waterworks projects and that an escrow/reserve deposit (about $470,000) would remain in the waterworks system as required by the board.
