Killeen-based water board approves bond order for emergency power project | Local News
With all but one of the region’s towns offering formal approval for the Bell County No. 1 Water Control and Improvement District emergency power project at the Belton plant, the council d district administration approved the debt issuance order. The official endorsement of Copperas Cove on Tuesday night left only Killeen, who is expected to vote on the matter next week.
The amount each city would have to pay for the project just north of $12 million, however, could change slightly, according to WCID-1 chief executive Ricky Garrett.
Each city’s commitment depends on the interest rate the water district gets in the bond market. Garry Kimball, the district’s financial adviser, said Wednesday morning that the US Federal Reserve’s recent interest rate hikes could impact the district’s bond market.
Kimball explained to the board that currently he and the district are budgeting on an expected interest rate of 4.75%.
“Hopefully we can lock this in somewhere in the top four,” Kimball said. “But the only constant right now is bond market volatility.
“And so there’s no way I can make a guarantee on that until we get closer to lockdown rates.”
Kimball explained that now that the board has approved the bond order, there are specific steps that must be taken before locking in rates.
First, Kimball said he and his team are actively drafting the offering documents, which will be shared with the market once they get legal and district feedback on the documents. Once done, the paperwork will be submitted to Moody’s Investors Service, which will review the district’s credit rating for its water system revenue bonds — a process that could take around four weeks.
“So it will probably be the end of July, potentially the first week of August, before we can enter the market and lock in our rates,” Kimball said.
A lack of emergency power generation at the Belton Lake water plant was felt by residents of Killeen, Harker Heights, Copperas Cove and Nolanville in May when an Oncor fuse blew, causing a power outage. power from the plant for three hours and forcing 200,000 people and area businesses to be subject to boil water advisories for days.
Similarly, during the Uri winter storm in February 2021, the district lost power to parts of the plant. With the recent passage of Senate Bill 3 in the 87th Texas Legislative Session, lawmakers required special districts, such as WCID-1, to have a backup generation that would provide continuous power in the event of an outage. current that lasts more than 24 hours.
The district needs approval from all client cities and entities before issuing debt, however, depending on how it is structured, Glenn Opel, the board’s bond attorney, told the board. district.
“Under your existing contracts with your customers, the district does not issue any debt that would burden its customers without those customers’ specific approval for that debt,” Opel told the board on Wednesday.
Garrett made it clear to those listening that the money the district receives from its client cities/entities is for a specific purpose.
“With these bond issues, the use of these funds is very limited to the bond,” Garrett said.
On Tuesday night, Copperas Cove City Council voted 5-0 to approve its share, with Councilors Fred Chavez and Jack Smith absent.
Down Interstate 14, members of the Killeen council discussed the issue in a shop meeting. Approval is expected on Tuesday.