Home News Local News Crockett Approves Issuance and Sale of $3.78 Million in Bonds

Crockett Approves Issuance and Sale of $3.78 Million in Bonds

89
0

Bids Awarded for Water Meter System, Storage Tank Improvements

By Will Johnson
Messenger Reporter

CROCKETT – During a called meeting of the Crockett City Council, held on Monday, June 17, the city leaders approved the issuance and sale of nearly $4 million ($3,788,000) in revenue bonds which will allow the municipality to make much-needed improvements to its infrastructure.

As the meeting got underway, Mayor Dr. Ianthia Fisher read the agenda item pertaining to the issuance and sale of $3,127,000 in revenue bonds.

City Administrator John Angerstein said the council had approved this and “… would give us the funds to replace water meters, rehab our ground storage tanks and rehab our elevated storage tanks.”

A motion was made, seconded and unanimously approved to issue the bonds.

The next item on the agenda pertained to the issuance and sale of $661,000 in revenue bonds.

“Mayor and council, the reason this is separated into two different bonds is when we initially went out for this project, the engineering estimates were not the same as they were two and a half years later when it came to closing. There were some cost differences which required us to enter into a separate agreement with the USDA,” Angerstein said.

The city administrator said the first bond – the $3.127 million – was able to be secured at a rate of 2% while the second bond was secured at a rate of 2.5%.

A second motion was made, seconded and unanimously approved.

When governments or governmental institutions need funding to finance certain projects that serve a civic purpose, they will issue municipal bonds as a way to supplement revenue for these public projects.

“Municipal bonds are debt securities issued by these organizations to bondholders. In other words, the bondholders are lending the issuing institutions a loan that is expected to be paid back at face value at a certain date. The date that the debt is supposed to be paid back is the maturity date. The face value, or par value, of the bond is the amount of the bond when it is issued,” according to the website www.municipalbonds.com.

It should be noted there are two different types of bonds. There is a general obligation bond in “… which issuers guarantee the repayment of the bond by any means necessary with full faith and credit. This usually means that the issuers will use their taxation power to raise the revenue to pay back the bond under any circumstances,” the website states.

The second type of bond is called a revenue bond, which the city of Crockett will be issuing.

“Revenue bonds are a type of muni that are repaid using the revenues from the projects the bonds helped fund,” the website reports.

As the meeting continued, Bob Thurber – Vice-president of KSA Engineers, Inc. – was asked to explain where the city was on the bid process for the various projects financed by the revenue bonds.

Thurber explained Johnson Labs came in with the lowest bid for the automated meter reading system.

The bid for the east side and southwest elevated storage tank rehabilitation went to Utility Services Company and the bid for the College Hill ground storage tank improvements went to a company from Longview.

Will Johnson may be contacted via e-mail at wjohnson@messenger-news.com.