Grapevine City Council approved issuing up to $30 million in certificates of obligation to help cover several public works projects at the city’s water and wastewater treatment plants.
Certificates of obligation are a form of debt municipalities, school districts and hospitals can issue, and they typically do not require voter approval, unlike general obligation bonds, according to the state comptroller’s website.
The resolution to issue the debt was approved unanimously during the May 5 meeting. Council member Sean Shope was absent from the meeting.
The overview
The certificates of obligation will help fund several projects, according to city documents, including:
- Maintenance at the city’s water treatment plant
- An emergency generator required by state law at the water treatment plant
- Relocation of a raw water pump house
- Replacements for clarifiers, filters, blowers, air lines and electrical systems within the wastewater treatment plant
City officials said the bonds were sold with a 3.9% interest rate and that they have a 20-year maturity. The city will receive the proceeds from the bonds June 2.
Grapevine’s bond rating of Aa1 through Moody’s and an AA+ rating from Standard and Poor’s was maintained.
“We’re in a pretty tough financial environment, not just in Texas, but in the world right now,” council member Duff O’Dell said. “That seems like a pretty good interest rate, and I know that’s because of the good reputation we have because of our finances.”
What else?
Council members previously approved a reimbursement resolution for up to $10 million in projects in March. City officials said they do not expect to increase the property tax rate to pay for the debt; rather, it will be funded through increases to utility rates for fiscal year 2025-26.
