City Council Decision on Loan Program for Seawater Desalination Project Leads to Low Interest Rates Saving Rate Payers $1.5 million
CORPUS CHRISTI, TX – At Tuesday’s regularly scheduled City Council meeting, Corpus Christi Mayor Joe McComb and the City Council approved issuing Utility System Revenue Improvement Bonds as security for the first portion of a loan from the Texas Water Development Board (TWDB) for the City’s Seawater Desalination Project.
The City has been approved for up to $222.5 million through the TWDB State Water Implementation Fund for Texas (SWIFT) loan program that can be used for funding design and construction of a Seawater Desalination Facility to provide a future potable water supply for all customers. The City will use a portion, $11.4 million, to cover costs for environmental data analysis, permits, land acquisition and other planning tasks. These next steps will provide the final information necessary for the City Council to determine how to proceed forward with the project.
City Council’s decision on using the first portion of the loan will NOT lead to higher water utility rates, and the City will receive a 20% reduction in interest as compared to traditional financing methods for the bonds issued in 2020. The final interest rate guaranteed to the City is 1.996%, saving the ratepayers 64 basis points in interest that equates to $1.5 million over the life of the bonds.
Today’s City Council action is the first reading of the Ordinance to collateralize the loan. The second reading and consideration of approval will be at the next City Council meeting on October 20, 2020.
For more information, media representatives can contact Public Information Officer Dale Stephán at 361-826-3234 or by email at firstname.lastname@example.org.