by JEN BIUNDO

Following several years of rapid growth, the city of Buda will issue up to $3.8 million in debt to expand the city’s wastewater treatment plant, councilmembers voted Tuesday night.

Rather than issuing revenue bonds, which would only be repaid through money earned from wastewater bills, the city will take advantage of lower interest rates available through certificates of obligation.

At a previous council meeting earlier this month, the council voted to repay the bond only through revenue from the waterworks and sewer system, and promised not to raise taxes to foot the bill.

“I swallowed pretty hard when I made the motion to use COs, since we’re backstopping it with property taxes if we have to,” said Councilmember Ron Fletcher.

A rate study performed last year by the Austin-based HDR Engineering firm suggested that with the plant expansion and other costs, wastewater rates would increase by about 12 percent by 2014.

Currently, residential users inside the city pay a base charge of $26.50, plus $3.22 per 1,000 gallons used. Developers pay about $1,400 in impact fees for every new living unit constructed.

State guidelines dictate when a city must expand its wastewater treatment facilities. At 75 percent capacity, a city must initiate design processes, and at 90 percent, a city must be ready to go to construction. Buda recently hit 90 percent capacity on its current wastewater treatment plant.

“We’ve got the plans wrapped up and we should be advertising for bids in the next 30 days, so  we’re right on target,” said Buda City Engineer Stanley Fees.

The project will expand the wastewater treatment plant near Buda City Park from .95 to 1.5 million gallons per day.

Currently, the city has 36 miles of sewer mains, 15 pump stations and 650 manholes in its sewer system.