Levelland reviews $26.3 million WWTP bid, proposes higher wastewater fee and planned bond consideration

Levelland City Council heard details Aug. 4 about a higher-than-expected construction bid for the city's wastewater treatment plant and preliminary plans to issue certificates of obligation to cover cost increases.

City staff reported that the WWTP construction bid is $26,265,000, approximately $6,615,000 higher than projected. To help cover debt service, staff proposed raising the Wastewater Improvement Fee from $21.62 per month to $27.00 per month and increasing the interest-and-sinking (I&S) portion of the property tax rate to 0.0465 per $100 valuation (an increase of 0.010229). Using the city's roughly 5,200 active utility accounts, the higher fee would generate an estimated $1,684,800 annually; combined with about $320,000 a year from effluent sales, staff projected wastewater fund revenues of $2,004,800, leaving an estimated shortfall of about $65,775 to be covered from wastewater reserves.

Staff told the council the WWTP bid shortfall and related debt would be presented as authorizations to issue Certificates of Obligation for consideration on Aug. 25. Two projects flagged for potential CO issuance are a $7 million addition for the WWTP and a proposed $3 million bond for a new Animal Services facility. Staff also noted the city carries approximately $516,000 in additional annual utility-revenue-supported debt service tied to recently issued bonds for water meter replacements; those payments are expected to be serviced from recovered meter revenue.

Council members did not vote on debt authorization at the Aug. 4 meeting; staff will return with the formal authorization request on Aug. 25 for council consideration.