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Levelland council approves certificates of obligation to cover WWTP overrun; wastewater fee raised
Summary
Levelland approved tax-exempt and taxable certificates of obligation to finance additional Wastewater Treatment Plant costs after bids came in $6.6 million over estimate; the council also approved raising the wastewater improvement fee from $21.62 to $28.00 and a modest I&S tax-rate increase.
Levelland’s City Council on Aug. 25 approved the issuance and sale of Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation—both tax-exempt Series 2025A and taxable Series 2025B—to cover cost increases on the city’s new Wastewater Treatment Plant (WWTP) and related projects. The motions to adopt Ordinance 1096 (2025A) and Ordinance 1097 (2025B) carried unanimously after staff presented updated financing figures.
City staff told council that "the WWTP construction bid is $26,265,000," roughly $6,615,000 above projections, and outlined repayment options using a mix of water/sewer revenue and property tax interest and sinking (I&S) funds. Staff also reported current FY25 property tax components (total rate 0.53500 per $100 valuation; I&S 0.036271; maintenance/operations 0.498729) and proposed an FY26 I&S rate of 0.0465 per $100—an increase of 0.010229.
The council also approved changes to utility fees tied to the project. On second reading the body adopted Ordinance No. 1095 to increase the wastewater system improvement fee from $21.62 to $28.00 per month and to raise the water improvement fee from $1 to $5 per month. Staff projected revenue from roughly 5,200 active utility accounts and existing effluent sales (about $320,000/year) and estimated that the combined WWTP debt service and revenue streams would leave a small annual shortfall to be covered temporarily from WW Improvement Fee reserves; staff said the city will reassess finances once the WWTP comes online in winter 2026.
Why it matters: the certificates shift additional project costs onto a combination of utility fees and debt service, affecting ratepayers and the city’s debt profile. Council packets show a repayment plan that uses roughly $1.747 million per year from the increased wastewater fee plus effluent sales to cover most of the annual CO payments, while about 25% of Series 2025 CO debt service for the WWTP is supported by I&S tax revenues.
Next steps: the city will place proceeds and contract documents into effect per the ordinances and monitor WWTP revenue once the plant is operational to determine if further fee adjustments are necessary.
