Belton City Hall

Belton City Hall

BELTON — A new elevated storage tank in north Belton is one of the four main projects set to be funded by $7 million in certificates of obligation approved by the City Council.

Intent to issue up to $7 million in debt was unanimously approved by the Belton City Council Tuesday night, with the debt to be paid off over the next 20 years. The debt issuance comes after the city decided to save its reserves for a future bond issuance planned for sometime in 2023.

Jennifer Ritter, who is with Certified Public Finance and advises the city, said the action by the Council does allow changes to be made before the issuance is put out for bid.

“The action tonight gives you the ability to move forward with the bond sale, it does not obligate to do so should you change your mind,” Ritter said to the Council. “Interest rates will be locked in when we sell on the morning of Jan. 11.”

Ritter said she hopes to get the interest on the certificates of obligation below 2.4 percent when it goes out for bid.

Projects to be funded by the debt include a new elevated storage tank in north Belton, at an estimated cost of $3.4 million, and improvements to the McFarland Estates Water and Sewer system, estimated at $1 million. Other projects include $850,000 for the Sixth Avenue waterline replacement and $800,000 for the Loop 121 pump replacements.

City spokesman Paul Romer said the city decided not to spend the $4.4 million it has in reserves on these projects, and save the money instead.

Romer said the city is not spending this money so it can instead take advantage of low interest rates, using its reserves later when interest rates rise. He said the city expects to have a $13.7 million bond issuance in 2023 to fund several capital projects including improvements to the Temple-Belton Wastewater Treatment Plant.

With the reserves expected to drop the future bond issuance below $10 million, city officials said it would make the bonds bank qualified and bring lower interest rates.

Finance Director Michael Rodgers said this move is expected to save about $500,000 for the city just by switching when the reserves are spent.

Belton Mayor Wayne Carpenter said he was initially wary about issuing more debt than needed.

“When we first started talking about borrowing money when we didn’t have to, it always throws up red flags,” Carpenter said. “But, thinking it through, it certainly makes more sense.”

The Council plans to hold a public hearing on the debt issuance during their 5:30 p.m. meeting on Tuesday, Dec. 14, at the Harris Community Center, 401 N. Alexander St. in Belton.