Tyler Water Utilities anticipates saving almost $2 million by refinancing two bonds.
The city of Tyler has no general obligation, or taxpayer-funded debt. It does, however, have revenue-based bonds in the water department - where the debt is paid back through earnings from selling water and wastewater services.
On Wednesday, the Tyler City Council approved a plan to refinance $4.3 million in bonds issued in 2008, which would have a net savings of $454,393, or 10.5 percent, according to the city’s financial representative Steven Adams, with Dallas-based Specialized Public Finance Inc.
The city also will refinance a portion of a 2009 bond series to gain a net savings of just under $1.4 million, or 16.8 percent.
“We are breaking this into two separate bond issues and doing a portion of the ‘09 for a specific reason relating to federal tax law,” Adams told Council on Wednesday. “In short, if you limit the amount of bonds you issue in a particular calendar year, you can deem those ‘bank-qualified’ and lower the interest rate. That’s why it’s two transactions.”
Bank-qualified bonds have a lower interest rate, but are limited to $10 million annually, according to the city.
The two will have to be sold 15 days apart.
Some items included in the bond packages include: purchasing a site for a future wastewater treatment plant, sewer and extensions at U.S. Highway 69 North, booster pump stations at Charleston Park as well as Baxter Street and rehabilitation of the Lake Tyler Dam.
In other business:
• The city voted to annex 18 parcels, including the site of a 135-home development south of the Knollwood subdivision. The land is near the intersection of Old Jacksonville and West Cumberland Road. Knollwood is not included in the annexation and will remain out of the city limits.
• The Council heard a presentation on a Historic Preservation Strategic Plan, but did not take a vote on approving it. That vote is scheduled for July 26.
• Four councilmembers were appointed to the downtown Tax Increment Reinvestment Zone No. 4 board of directors. The board also will have three appointed members from Smith County and two from Tyler Junior College.
Tyler’s representation includes Councilmen Darryl Bowdre, Don Warren and Bob Westbrook. Mayor Martin Heines is the chairman of the board.
• A contract for $100,000 to survey the sidewalks in Tyler and surrounding communities was approved. The survey was conducted though the Tyler Area Metropolitan Planning Organization, and will be paid for through federal funds. Because Tyler is the hub for the MPO, it must follow the city’s policies and go through the Council for approval.
• Gollob, Morgan, Peddy PC was approved to conduct the city’s annual outside financial audit.