Expansion of Buda’s wastewater treatment plant, along with a proposed Aquifer Storage and Recovery (ASR) project, were part of $27.8 million in certificate of obligation (CO) bonds approved by city leaders earlier this month.
Approval of the bond sale was made to Hilltop Securities Inc., through a competitive bid process, according to a press release.
The bonds were sold to Hilltop Securities with an average interest rate of 2.93 percent. The low rates will save Buda approximately $2.5 million over the life of the 25-year bond.
Hilltop Securities was one of nine banks competing for the city’s CO bonds. Buda was able to secure a low interest rate in large part to an AA bond rating through Standard & Poor’s Rating Agency.
An AA bond rating assigned by Standard & Poor’s means the city has a very strong capacity to meet its financial commitments, according to a city press release.
“This is validation of the city’s efforts in planning and financial prudence,” the release said.
Ultimately, the lower interest rate means taxpayers will pay less in rates over the life of the bonds, according to the release.
The bonds will be paid from utility funds, which are funded through user fees and capital impact fees.
All of the bonds issued revolved around projects that are directly tied to managing growth.
One of the major projects involves a $20.3 million expansion of Buda’s existing wastewater treatment plant.
Buda’s current plant, located on Garison Road, has a capacity of 1.5 million gallons per day, according to the city’s website. Micah Grau, Buda assistant city manager, said the current plant has an average outflow of 1.15 million gallons per day (GPD), or at 76 percent capacity.
The expansion would increase capacity to 3.5 MGD, which Grau said would give the city another 10 to 15 years of wastewater treatment before it has to upgrade again.
Grau said approval of the CO is a “big step forward in the project. Currently, Buda officials are working to finalize the design of the expansion, which is 95 percent complete.
However, Buda is waiting to hear from the Texas Commission on Environmental Quality (TCEQ) on the status of its permit to expand its WWTP before it can proceed.
The permit, which was filed in 2014, would allowt an additional discharge point in a tributary within the Sunfield Municipal Utility District.
Grau said the city held a required public hearing on the permit in March 2017 where several people for and against the expansion weighed in.
“We haven’t gotten any indication there will be a contested permit hearing,” Grau said. “But we also haven’t gotten final permit approval. We’re expecting that any day now.”
If approved, construction on Buda’s WWTP would begin Spring 2018 and could last 18 months.
The timeline for Buda’s proposed ASR project could be drawn out despite city officials approving funding for it.
Grau said there would be a “lot of testing involved” for ASR, which began after city leaders approved a feasibility study to be conducted in 2017.
Results of the study could show the city as an option for Buda to obtain more water.
Grau said the next steps for ASR, a $1.8 million project, would involve hiring a company to design the project. Buda would then coordinate with the Barton Springs Edwards Aquifer Conservation District (BSEACD) and TCEQ on permitting.
ASR involves injecting treated, potable water into an existing aquifer to store for future use. Buda is planning to inject treated water pumped from BSEACD wells into the Trinity Aquifer.
“It gives us more flexibility in the future, especially with the Alliance [Regional Water Authority’s pipeline project] coming online in 2023,” Grau said. “It gives us more flexibility to store water.”
What Buda capital improvement projects will the city-issued bonds pay for?
- Wastewater Treatment Plant Expansion: $20,326,000.00
- Effluent Force Main: $6,312,000.00
- Garison Road Wastewater Interceptor: $770,000.00
- Aquifer Storage Recovery Pilot Project: $1,896,000.00