The North Texas Municipal Water District is set to take the last step Thursday toward borrowing $354.5 million from a state water fund to build a second treated-water pipeline from its Leonard Water Treatment Plant.
The district's board will consider a resolution authorizing Series 2026A revenue bonds, which will be sold directly to the Texas Water Development Board through the State Water Implementation Fund for Texas, known as SWIFT. A staff memo calls the vote the final action the board needs to take before the money arrives, which is expected around Nov. 19.
What the money pays for
The proceeds would fund Segments D and E of Leonard Treated Water Pipeline No. 2, part of the third phase of the district's Bois d'Arc Lake and Leonard Water Treatment Plant program. The resolution also lets the district use bond money for a reserve fund and the cost of issuing the debt.
The terms
According to the memo, the state fund's interest rate for the deal is 4.29%, set when the water development board priced its own bonds on Sept. 23. The memo says SWIFT financing carries an interest subsidy of as much as 14% on 30-year bonds and puts the estimated total debt service savings for the project at $25.371 million.
The repayment schedule in the resolution runs 30 years. Principal payments are due each Sept. 1, starting at $10.005 million in 2027 and rising to $19.71 million in 2056.
The memo lays out how the loan came together this year. The district applied in January, the water development board committed $370.77 million in July, and the district's board approved a financing agreement for the smaller $354.475 million amount on Aug. 27.
Backing out now would be costly. If the district fails to issue the bonds and close with the state by the deadlines, it would lose the commitment and owe a $20,746,793 termination payment, the memo says.
