Abilene council publishes notice to seek $49 million for Northeast water plant rehab; final approval set for March

The Abilene City Council on Tuesday approved publishing a notice of intent to issue certificates of obligation that would raise up to $49,000,000 to rehabilitate the Northeast Water Treatment Plant.

Marjorie Knight, director of finance, said the package will be split into two series: about $48.895 million issued at a rate the city estimates near 2.33% and a $105,000 series at 0% that can be used only for an asset management plan. Knight said publication of the notice is the first step required by state law before the council can authorize the bonds.

Matthew Dane, the city’s water utility director, said the project is the first of several planned upgrades stemming from a multi-year master plan. He described the work as rehabilitation—electrical upgrades, dewatering and preparation for a later expansion—rather than a capacity increase, and said the city is coordinating some electrical improvements with a separate contract for backup power generation.

Dane told the council that the Texas Water Development Board has approved the city’s financing application and that the council’s next step is a final authorization, currently scheduled for a March meeting. He also said the state board’s action makes the project eligible for reduced or zero-interest financing that is expected to lower borrowing costs compared with market debt.

Council members asked how the debt service would be paid; Dane and Knight said water rates—not property taxes—would generate the payments. Dane added that a federal Water Infrastructure Finance and Innovation Act (WIFIA) program could be paired with other funding to defer payments and potentially lower total interest costs.

The council voted to publish the notice of intent; staff said the full authorization vote will return in March.

Next steps: staff will publish the required notice, and the council will consider final authorization in March.