College Station City Council has approved $37.25 million in certificates of obligation to support water infrastructure.
The certificates will allow the city to improve and expand its waterworks system. Projects will primarily revolve around building water wells, alongside auxiliary distribution, transmission and system lines.
On top of empowering the city to build essential infrastructure, the certificates of obligation will also allow officials to pay fiscal, engineering and legal fees associated with funded projects.
The sale of certificates of obligation is one of three vehicles for debt issuance the city uses to fund capital projects featured in the annual budget. Certificates of obligation are similar to general obligation bonds, which are paid through the debt service portion of the ad valorem tax rate. Unlike general obligation bonds, certificates of obligation leverage at least one additional revenue stream, allowing greater flexibility in how they can be issued.
Using certificates enables the city to proceed with critical water infrastructure projects needed to keep pace with population growth. According to College Station Assistant Finance Director Michael DeHaven, the certificates are associated with the city’s utility funds, which will help lead to favorable interest rates.
Photo by Abdo Alshreef
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