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Groves council approves notice to issue up to $26M in certificates of obligation for sewer, wastewater and meter projects
Summary
Council voted to publish notice of intent to issue certificates of obligation not to exceed $26 million to fund a wastewater treatment plant upgrade, the 25th Street sewer bottleneck and an AMI water-metering project; staff and advisors discussed likely sizing, 20-year payment scenarios and legal limits on use of proceeds.
Groves city leaders on Jan. 12 approved a resolution authorizing publication of notice of intent to issue certificates of obligation (COs) in an amount not to exceed $26 million to finance several public-works projects, including wastewater treatment plant improvements, correction of a 25th Street sewer bottleneck and an advanced metering infrastructure (AMI) water-meter project.
Robert Henderson of RBC Capital Markets, the city’s financial advisor, told council the COs will be a combination tax-and-revenue pledge and that final sizing is likely to fall between roughly $21 million and $26 million; a working example discussed at the hearing showed that a $21 million issue over 20 years at 5% interest would create about $1.7 million in annual debt service. Henderson said final debt-service calculations and any developer contributions will be presented when the council returns for final action.
Bond counsel Lance Fox reminded council that CO proceeds must be used only for the projects described in the notice — streets, drainage, sewer, water meters, buildings and similar public-works — and cannot be used for unrelated environmental-remediation expenses. He described the statutory process, the required newspaper notice and the 45-day petition period under Texas law and said the city must certify permitted uses to the attorney general when proceeds are issued.
Council approved the resolution to publish the notice and directed staff and the finance team to return with final terms and bid numbers at a later meeting; staff said they expect to return with more refined cost estimates ahead of any sale. Council also approved a related reimbursement resolution allowing the city to make interim expenditures and later reimburse itself from the CO proceeds once issued.
Vote: The council approved the notice-resolution (Resolution 2026-01) and the reimbursement resolution (Resolution 2026-02) by recorded vote. Staff said expected debt-service and tax-rate impacts will be refined prior to final action and depend on final issue size and market conditions.
