Buckhannon council authorizes up to $6M interim note for water treatment plant design; selects bank for financing

The Buckhannon City Council voted unanimously Sept. 4 to enact a Note Authorizing Ordinance permitting the issuance of a Water Revenue Bond Anticipation Note, Series 2025 (tax-exempt) in an amount not to exceed $6,000,000 to finance design, property acquisition and preconstruction activities for planned improvements to the city’s waterworks system.

The ordinance and a companion supplemental parameters resolution were presented by attorney Thomas Aman of Steptoe & Johnson and recommended by Director of Finance Amberle Jenkins. Councilmembers Jack Reger and Robert Zuliani moved the final actions; the motions carried without dissent.

The ordinance makes the BAN payable solely from surplus revenues of the water utility and from the proceeds of future revenue bonds or grant funds that the city secures to permanently finance the project. The ordinance also states that the Series 2025 note will be junior and subordinate in lien position to the city’s outstanding Series 2016A water revenue bonds.

Aman walked the council through the ordinance’s key provisions, including the project and project-cost definitions, the establishment of funds and accounts (Project Fund, Revenue Fund, Series 2025 Note Sinking Fund, Renewal and Replacement Fund), and default and remedy language. Jenkins and Aman told council members that the city solicited proposals and that Ohio Valley Bank presented the most attractive financing terms; council then accepted the bank’s proposal and adopted the supplemental resolution authorizing sale and related documents.

The action followed a public hearing earlier in the meeting. Mayor Robbie Skinner opened the hearing and invited public comment; no one spoke. Reger and Zuliani moved to close the hearing before taking final action.

City documents presented at the meeting, including a frequently asked questions packet, estimate the overall water project budget at roughly $47.3 million: about $33 million for a new treatment plant and roughly $5.5 million for pipeline upgrades, with the balance covering engineering, property acquisition, financing and contingencies. The city’s FAQ states the project funding plan anticipates roughly $13 million in grant funding and $34.3 million in loans from federal and state sources (USDA, WVDEP, IJDC), all of which would be repaid from utility rates and system revenues.

The same city FAQ projects a phased increase in water rates to cover debt service and operating costs, estimating a total increase of approximately 62% that would raise an average monthly bill from $27.26 to $44.14 (based on a 3,400-gallon usage example). The FAQ says the first, smaller increase would likely occur by late 2025 or early 2026 to cover interest on interim financing (the BAN) while the city pursues longer-term loans and grant awards.

Next steps identified at the meeting include closing the interim bank financing, continuing design and property acquisition, pursuing grant applications and long-term loan closings, and returning to council for rate ordinances and any additional approvals required by funding partners. The ordinance and supplemental resolution authorize specific administrative steps — appointment of a registrar and paying agent and adoption of a tax compliance policy — needed to deliver the BAN to the lender.

The council’s action does not authorize taxation to repay the BAN; the ordinance explicitly states no taxes may be levied for payment of the Note or interest. The council also adopted associated administrative items the ordinance requires, including a tax compliance policy and registrar agreement to support issuance. The City will seek the long-term revenue bonds and grant awards that, according to the ordinance, will be used to repay the BAN.