Katy council opts into TWDB financing program for $20.6 million wastewater expansion

The Katy City Council voted June 8 to participate in the Texas Water Development Board’s direct-purchase financing program for a roughly $20.6 million expansion of the city’s wastewater treatment plant.

ABHR consultant Christina Miller explained the TWDB program’s mechanics and benefits: the state purchases the city’s revenue bonds in a direct-purchase model, allowing the city to access the state's AAA credit and secure below-market interest rates. Miller said the financing would be structured with a 30-year repayment period and would be paid from water and wastewater revenues rather than the general fund or property taxes.

Miller cautioned council that the vote that night authorized participation only; the exact interest rate will be known after the state’s bond sale in late July. Staff estimated a ballpark customer impact of about $3.50 per account per month to support the infrastructure, but council members and staff clarified that tonight’s action did not approve any specific rate or fee increase.

Council members asked about the confidence level behind the $20.6 million estimate; city staff said the number was based on past similar projects, a materials-and-equipment estimate and a 15% contingency. Miller said the TWDB process has tight application timelines and missing the June 10 window would likely push the project to next year’s cycle and increase borrowing costs.

Why it matters: Participation in the TWDB program can lower borrowing costs for a major utility expansion used by all water and sewer customers; the city’s decision keeps the project on the TWDB timetable and allows staff to finalize financing documents and later present any rate implications to council.

Next steps: Staff will refine the financial model, await the state bond pricing in July, finalize documentation and bring bond/ordinance adoption items back to council later in the summer.