City Manager Jack Hamlett told council members that the city would be able to sell that amount of certificates without affecting the city’s current tax rate for debt service.
Victor Quiroga Jr., the city’s financial adviser since 2001, confirmed what Hamlett said, reminding council members that interest rates remain historically low.
Quiroga said the council would need to inform taxpayers that the city intends to issue new debt.
On Sept. 23, Frost, the company Quiroga now represents, will announce the city’s intention to sell certificates of obligation.
Hamlett said at least half of the proceeds of the sale would go toward building a third clarifier at the George P. Morrill, I Water Treatment Plant at Swinney Switch.
Engineering studies have shown a serious need for a third clarifier.
Hamlett said the remainder of the money raised by the sale should be used to build at least one more storage tank for Beeville.
The city manager said the cost of the clarifier could run as much as $1.5 million to 2 million. Because so much of the money from the sale of the certificates would be used toward the new clarifier, Hamlett said he would like to see the Beeville Water Supply District provide some of the funds to build another water storage tank.
Hamlett said the BWSD board is scheduled to meet on Wednesday, Aug. 27. Board members will be updated on the projects at that time.
Quiroga said with the schedule he has worked up for the sale, the city could have the funds by mid-October.
Councilman John Fulghum made the motion to approve a resolution stating the intent to sell the certificates and Councilman George P. “Trace” Morrill, III offered the second.
The motion passed without opposition.
Gary Kent is a reporter at the Bee-Picayune and can be reached at 343-5220, or at reporter@mySouTex.com.