Two-minute impact
During a March 7 City Council meeting, council members approved a list of the top priorities related to water capital improvement projects. These projects are intended to address the pressing need for increased capacity due to rapid growth seen in recent years, according to city staff.
The approved $349 million in funding will come from a city-issued certificate of obligation, or CO, bond. These CO bonds are typically backed by taxes or impact fee revenues, and they do not require voter approval unless 5% of qualified voters within the city’s jurisdiction petition for an election on the spending in question.
COs provide local governments with flexibility when projects need to be financed quickly, according to the Texas Comptroller.
For Hutto water customers, this means the city will tack on an additional $10 to the water base fee and $10 to the wastewater base fee beginning in June to pay on the debt of the issued bonds, according to city documents.
A notice of intent will be brought back during an April 4 meeting, in which council members will finalize a specific rate structure for water customers, incorporating adjustments based on the ratio of water to wastewater users, as well as impact fee rates.
What they’re saying
Mayor Mike Snyder expressed concerns about relying too heavily on impact fees to repay the CO bond.
“We have a lot of hope and on growth. As long as the growth happens, we're going to be OK, but if we have one slowdown, ... if we have one hiccup, from my understanding, it really drops down to the public. So I almost feel better if we relied a little bit less on impact fees,” Snyder said. “In my mind, we're robbing Peter to pay Paul, because we're taking the impact fees of new [development] to pay for old projects.”
Snyder explained he would rather see a modest yearly increase.
City Manager James Earp noted iron levels in the water are causing brown water. This issue is not listed on the priority list.
“That is an ongoing complaint from a lot of people in the city and definitely one that should be addressed when we can. I know we have things that we have to address, and [iron removal] is not a part of the list, but it needs to be on the list,” Place 2 City Council member Dan Thornton said.
Earp recommended adding this project to the 2026 bond issuance, as it will require at least a year of design work before construction could begin.
“We probably cut a little too thin whenever we cut down the list. Arguably, we should have kept on [iron] removal and we didn't,” Earp said. “A city our size, with the sophistication level that we're getting to, we ought not to be having brown water every time we have a [water] line break.”
By the numbers
With the approval from council, $277 million in CO bonds will be issued in 2024 and an additional $72 million in 2026.
The city of Hutto pays an annual $33 million in debt service, with future annual debt service costs estimated between $25 million-$30 million due to financial restructuring, according to city documents.
Pricing of the certificates will begin in June, with the delivery of funds by July.
The top-priority water projects approved by council include:
Water
Northwest transmission water main
- Timeline: complete summer 2025
- Cost: $5.4 million
- Timeline: complete fall 2024
- Cost: $17.8 million
- Timeline: complete winter 2026
- Cost: $ 3.2 million
- Timeline: complete summer 2024
- Cost: $1 million
South Wastewater Treatment Plant expansion to 6 million gallons per day (design)
- Timeline: complete fall 2026
- Cost: $14 million
- Timeline: complete winter 2026
- Cost: $90 million
- Timeline: complete summer 2025
- Cost: $12.2 million
- Timeline: complete fall 2026
- Cost: $36.2 million
- Timeline: TBD
- Cost: $14.2 million
- Timeline: complete 2028
- Cost: $29.4 million
