Regional Wastewater System
title
Regional Wastewater System Revenue Bonds, Series 2025
end
SUBJECT
recommendation
Adopt Resolution No. 25-15 Request authorization to issue authorizing the issuance of Revenue Bonds for the Regional Wastewater System.
end
PURPOSE
These revenue bonds will be used to fund the Sister Grove Resource Regional Water Resource Recovery Facility (RWRRF) Phase II project in the Regional Wastewater System (RWWS)
RECOMMENDATION
The Executive Director and NTMWD staff recommend the Board of Directors adopt Resolution No. 25-15, “Resolution Authorizing the Issuance, Sale, and Delivery of North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2025; and Approving and Authorizing Instruments and Procedures Relating Thereto.
|
Consultant: |
N/A |
|
|
|
|
Scope: |
Fund Sister Grove RWRRF - Phase II project in the RWWS using the Rowlett Creek Regional Wastewater Treatment Plant (RWWTP) committed funding from the Texas Water Development Board (TWDB) |
|
|
|
|
Project: |
Sister Grove Regional Water Resource Recovery Facility Phase II project |
|
|
|
|
Amount: |
Approximately $37.855 million of 2025 revenue bonds will be issued |
|
|
|
|
Committee: |
Staff reviewed with the Finance Committee on April 9, 2025. |
DRIVER(S) FOR THIS PROJECT
|
Strategic Objective: |
1.2 Successfully Deliver Capital Program |
|
☐ Regulatory Compliance |
☐ Asset Condition |
|
☐ Capacity |
☐ Redundancy/Resiliency |
|
☐ Relocation or External Requests |
☐ Operational Efficiency |
|
☐ Safety |
☒ Administrative |
|
☐ Policy |
☐ Other _____________ |
BACKGROUND
• On October 29, 2019, NTMWD submitted a Project Information Form (“PIF”) to the Texas Water Development Board (“TWDB”) for financial assistance from TWDB’s Clean Water State Revolving Fund (“CWSRF”) to fund $75.47million in costs for the Rowlett Creek Regional Wastewater Treatment Plant.
• On November 13, 2019, the TWDB formally invited NTMWD to submit an application for funding.
• On December 19, 2019, NTMWD authorized filing the application for financial assistance.
• Financial assistance under the 2020 CWSRF Program provides 130 basis points interest rate subsidy for 30-year bonds utilizing non-equivalency funding.
• The TWDB notified NTMWD that the project is eligible for non-equivalency loan funding on May 20, 2020.
• The TWDB authorized a commitment for financial assistance at the TWDB board meeting on July 23, 2020, with a multi-year commitment of:
o $37.615 million to expire on July 31, 2021
o NTMWD closed its Regional Wastewater System Revenue Bonds, Series 2021, on February 25, 2021.
o $37.855 million to expire on July 31, 2024
• On December 1, 2021, NTMWD requested a transfer and use of funds from the Rowlett Creek Regional Wastewater Treatment Plant project for use on the Sister Grove Regional Water Resource Recovery Facility project.
• On February 17, 2022, TWDB approved the use of the funds request for funding the Sister Grove Regional Water Resource Recovery Facility Phase II project through the Rowlett Creek Regional Wastewater Treatment Plant project.
• On March 11, 2024, NTMWD requested to extend the commitment date for the unclosed financial assistance of $37,855,000 for an additional 12 months from July 31, 2024 to July 31, 2025.
• On May 9, 2024, TWDB approved the commitment extension date to July 31, 2025, per TWDB Resolution 24-029.
• Debt service savings for a non-equivalency project have been estimated to be $9.694 million.
• Terms of the loan are as follows:
o Interest rate subsidy of 130 basis point reduction for non-equivalency loan funding
o 30-Year repayment period
o Loan may be prepaid after 10 years
• Should NTMWD fail to issue its bonds and close the finance transition with the TWDB by the expiration dates, NTMWD will lose the TWDB commitment for financial assistance.
• Staff and members of Hilltop Securities, Inc., also presented the Finance Committee with timelines for the sale and a summary of the financing plan.
• At this time, $37.855 million of 2025 contract revenue bonds will be issued.
• Final rates will be provided by the TWDB on April 24, 2025, and the estimated interest rate is 3.01%. The bond issue will close on May 22, 2025.
• NTMWD bond counsel McCall, Parkhurst and Horton, LLP, has prepared the attached Bond Resolution, and NTMWD financial advisor Hilltop Securities, Inc., has prepared a savings analysis related to the project.
• Representatives from both McCall, Parkhurst and Horton LLP, as well as Hilltop Securities, Inc., will be available at the Board meeting to review the documents and financing procedures.
FUNDING
N/A