BURTON CITY COUNCIL APPROVES PUBLISHING NOTICE OF INTENT TO ISSUE CERTIFICATES OF OBLIGATION

  

The City of Burton is taking steps in preparation for the possible issuance of certificates of obligation (COs) to help fund its water well project.

The Burton City Council on Tuesday approved a resolution authorizing publication of the city’s notice of intent to issue combination tax and surplus revenue COs.  The funding from the COs, which is estimated to not exceed $685,000, would be used to pay contractual obligations related to planned water system improvements, specifically the drilling of a new water well.  It will coincide with $593,800 in grant funding received through the Texas General Land Office.

Gregory Miller of Bickerstaff Heath Delgado Acosta LLP, the city’s bond counsel, said the notice of intent must be published at least 45 days before issuing the COs.  The council is expected to proceed with the issuance at its meeting on February 11^th.

Mayor Karen Buck said the COs will be used to help pay down a loan for the project and will be a combination of property tax dollars, water revenue and potentially sales tax revenue.  She acknowledged that the city will have to remain fiscally conservative as it pays off its existing and new obligations, but she believes the city will be able to do so without increasing taxes.

City Secretary Angela Harrington suggested that, since the city now has healthy sales tax income, it could reduce the maintenance and operations (M&O) portion of the tax rate and increase the interest and sinking (I&S) side, using more property tax dollars for debt service while utilizing the increased sales tax money for general fund operations.  She added that the new amount the city expects to pay in COs is not any more than what it has already been paying, other than during the timeframe that the city will be paying on its two separate obligations at the same time.

Buck said the city is considering charging owners of unused and abandoned water meters a standby fee, in order to lower the city’s meter count.  Harrington said data is still being collected, but if the city chooses to implement the fee, it would come after the start of the new year. 

Miller said if the city approves the issuance in February, it can expect to close on the COs within 30 days.