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Hutto authorizes $10 million for water improvements

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By Kelsey Wilkinson Friday, 22 January 2010

HUTTO — At its Jan. 14 meeting, the Hutto City Council voted to issue up to $10 million in Certificates of Obligation, a form of debt incurred by a local governments that does not require a bond election, to fund utility and park improvements. The council began the public notice process to issue the bonds in November and priced them Jan. 13. The certificates are unrelated to the General Obligation bond election in early November.

Approximately $8 million of the proposed issuance will be used to purchase the current 1.7 million-gallon wastewater treatment plant that is currently owned by the Lower Colorado River Authority. The council approved a purchase agreement with LCRA in September to take ownership of the plant. Purchasing the plant enables the City to save on administrative fees related to bonds issued for construction of the plant. The sell of the plant is expected to close on Feb. 10. It also allows the City to begin preliminary design of the proposed Brushy Creek wastewater treatment facility, which is expected to be operational by 2013.

While purchase of the plant was not included in the FY10 Budget, the City will apply approximately $500,000 that would have previously gone to LCRA towards annual debt service payments.

The remaining bonds will be used to complete construction of Hutto Lake Park—construction is expected to begin this spring. They will also be used to rehabilitate an aging wastewater line along FM 1660 N. and design utility improvements to spur economic development along Toll 130. The City partnered with the Hutto Economic Development Corporation to extend utilities to the east side of Toll 130 to provide shovel-ready ground for economic projects. Only design costs are included in this debt issuance. Funding for construction will be made in a future debt issuance. Design is estimated to take approximately eight months. Delaying debt issuance for construction costs enables the City to save money related to interest payments.

Certificate of Obligation Uses:

$8 million to purchase a Waste Water Treatment Plant from the Lower Colorado River Authority
$400,000 to complete construction of Hutto Lake Park
$215,745 for Waterline Design along CR 108
$707,100 for design of Brushy Creek wastewater treatment facility
$150,000 for improvements to wastewater line along FM 1660