Council members unanimously approved a notice of intent to issue the certificates of obligation bonds during the April 7 meeting. A certificate of obligation bond differs from a general obligation bond because they can be issued without an election.
The estimated value of the debt issuance is expected to be slightly under $19.1 million, according to town documents.
What you need to know
The revenue raised from selling the bonds are expected to help pay for fire department facilities and water and wastewater infrastructure, according to town documents. Projects include:
- Fire station improvements
- Lakeside water reuse pump station and ground storage tanks
- Stonecrest Pump Station phase two
- Stonehill Pump Station motor replacement
- Timber Valley and Fairfield Lane water line replacement
- Inflow infiltration and evaluation and repair
- Timber Valley and Fairfield Lane sewer line replacement
- Utility asset management and utility replacement
- Wastewater system security implementation
- Wastewater treatment plant effluent filter rehabilitation
- Wastewater treatment plant primary treatment area improvement
In addition to the costs for the projects, town officials anticipate financing costs of $98,000, per town documents.
Diving deeper
Julie Taylor, Flower Mound’s director of treasury operations, said that the town has six months to sell the bonds after issuing the intent to do so. If issued, the certificates of obligation would reach maturity, the point at which the principal amount is repaid and interest payments from the town cease, in March 2045, according to the intent resolution.
Last October, town council approved a reimbursement resolution for nearly $43.86 million to help pay for fire facilities and improvements to the water and wastewater infrastructure, per town documents. However, town staff identified the opportunity to delay or use alternate funding sources for some projects in the 2024-25 Capital Improvement Program.
“Over the course of the year, staff evaluated the projects and determined that the fire stations could be phased into different years, lowering the debt sale by $15 million,” Taylor said. “Those will occur in future years.
Taylor added that the town could save a further $8 million by using water impact fees for the Lakeside water line project.
Looking ahead
Council is expected to consider a resolution approving the parameters for selling the bonds, including an interest rate range, June 2, per town documents. A sale of the certificates of obligation is scheduled for June 4.
