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Council approves bond defeasance, reimbursement resolution and $9.95M HB500 grant application for water-line work
Summary
Council authorized paying off two utility bond series (2008 and 2019), approved intent-to-reimburse language for water-project expenses, and authorized submission of a $9.95 million grant application under House Bill 500 to fund part of a multi‑million dollar water-line replacement program.
The Kermit City Council approved a package of finance actions aimed at improving the city's fiscal position ahead of a larger water-line financing plan.
Council approved resolution 26-20 authorizing the city to defease/pay off outstanding combination tax-and-revenue obligations from 2008 and 2019. Staff and financial advisors said the combined outstanding principal is roughly $1.95–$1.96 million ($560,000 remaining on the 2008 series and about $1,395,000 on the 2019 series) and estimated interest savings of about $95,000 if the bonds are paid now. "We anticipate that that would run us just under $2,000,000 to pay those off," a staff member (speaker 6) said during the presentation.
Council also approved resolution 26-19 expressing intent to reimburse prior expenditures for the water-line project from proceeds of future tax-exempt obligations, a standard step to preserve eligibility to use bond proceeds for earlier costs when bonds are issued. The council then approved resolution 26-21 authorizing submission of required documents to the Texas Water Development Board under House Bill 500; staff said the city will apply for $9,950,000 to help fund a larger $16,000,000 estimate to replace 2-inch water lines. "What we're going to ask for will be 9,950,000 in order to be able to help us begin the process of the 2 inch water line replacement," the staff member said.
Officials said paying off the older obligations and securing grant funds would improve the city's balance sheet ahead of issuing larger water bonds and could reduce utility bills for customers over time; staff cited an estimated per-bill reduction figure during discussion. The council approved the measures by voice vote.
