Devine issues Certificates of Obligation to finance $1.1 million water meter replacement

Nearly $1.1 million in Certificates of Obligations (COs) were authorized by the Devine City Council during their Regular meeting held last Tuesday, April 16.
The COs will be used to fund the replacement of the approximately 1,700 water meters in the City, an estimated 700 of which no longer accurately register water usage.
All of the meters are past their guaranteed lifespan.
Jeff Kuhn, the City’s bond lawyer and an attorney with Norton Rose Fulbright, said the City received 11 bids to provide the COs.
“That is a testament to the confidence that the communities have in the City Council and how they’re implementing fiscal policy,” Kuhn said.
Lytle’s Community National Bank submitted the lowest and winning bid with an interest rate of 2.18 percent, a figure Kuhn called “fantastic.”
“We should have borrowed $100 million at 2.18 percent,” Kuhn said.
The COs’ maturity is from 2020 to 2029, which the City plans to pay for with utility system revenues.
“Once you put in all the water meters that you want, if you have excess money, you can do any other utility system improvement that you want,” Kuhn said.
The City was forced to issue the COs after being denied funding by the Texas Water Development Board. In 2018, the TWDB awarded the City over $9 million in low-interest loans to fund the replacement of asbestos cement water pipes throughout Devine.
Closing on the COs is set to take place on Wednesday, May 15.
By Marly Davis
Staff Writer