Council votes to approve bond issue

18% increase in water, sewer rates for residents expected

At the February 16 meeting of the Mount Pleasant City Council, City Finance Director Mykael Reeve spoke to the board regarding plans to secure a $56.7 million bond to improve and expand the city’s water and sewer infrastructure.

According to the City, this bond will be used to construct, acquire, install, replace, equip, and improve the City’s water and wastewater system facilities consisting of transmission lines, lift stations, storage facilities, retention dams, treatment plants, necessary street and road repairs, and acquisition of interests in land or easements necessary for these projects in accordance with Texas Commission on Environmental Quality’s regulations. The funds will also be used for paying fees for legal, fiscal, engineering, architectural and other professional services in connection with these projects. The total projected cost of these improvements is $50 million.

The council unanimously approved entering contract agreements with KSA Engineers, detailing designs for improvements and expansion of the water treatment system, as well as a sewer master plan to include a new wastewater collection line to alleviate other parts of the system. The plans must be approved by the TCEQ in order to proceed.

These improvements do come at a price for Mount Pleasant residents. According to City Manager Ed Thatcher, citizens residing in the city can expect to see an 18% increase in water and sewer rates over the course of the next three to five years.

“We intend to issue a gradual rate increase that would go from fiscal years 2022 to 2025,” said Reeve. “We’re looking at ways to maybe reduce that and maybe stretch it out over five years. There may be some ways that we can get that down to around 10%.” She stated that the City is working with rate specialists to phase in new rates.

Councilman Henry Chappell II stated that he “wants citizens to understand that [the council] is trying to minimize the impact.”

“We’re trying to figure out the best way to get these done. It is gonna cost citizens more money, but we don’t have a choice in this,” said councilmember Galen Adams. According to Thatcher, if the council elected not to begin these improvement and expansion projects now, it would mean more work in the future.

According to Reeve, interest rates on bonds are very low currently. “We’re expecting a 2.13% interest cost on this,” she said. She went on to say that if the council came back in one to three years, the projected interest rate would be around 4%.

Councilmember Sherri Spruill inquired about the remaining $6.7 million expected to be left over after the completion of these projects, and Reeve stated that the funds would be allocated to other water improvement projects, as the system is “badly in need of repair.”

Thatcher states that the water system is in good condition, though not in as favorable a condition as the city parks.

Reeve said that the bond funds are expected to be available in April and that she plans to “invest some of this until we need it.”

The City plans to pass the bond using certificates of obligation, rather than general obligation. In general obligation bonds, the City is required to hold a bond election; in the event of certificates of obligation, the City is not required to hold this election and can pass the bond without voter approval in most cases, according to the Texas Comptroller. If 5% of qualified voters within the jurisdiction petition for an election on the spending in question, the City would be forced to hold the bond election. The current principal of all outstanding debt obligations of the City prior to the passing of this bond is $15,825,000.

Councilman Chappell moved for the approval of issuing the certificates of obligation. Councilman Tim Dale seconded the motion, and the council voted unanimously in favor of the issuance. “Such certificates are to be made payable from ad valorem taxes and a lien on and pledge of surplus revenues of the City’s waterworks and sewer system,” said the City.

Mount Pleasant Tribune

PO Box 1177
Mount Pleasant TX 75456
903-572-1705