In their meeting held on Feb. 27, 2008, the Tyler City Council unanimously approved a measure to allow the sale of utility bonds to fund water and sewer infrastructure projects in developing areas of Tyler. The initial 2008 bond would generate $5 million to launch several projects that would facilitate development in both north and south Tyler. In a phased approach, an additional $20 million could be raised by the sale of bonds in the next few years.
Projects that would be funded with the bond revenues include:
- The purchase of property in south Tyler for a future wastewater treatment facility. This site would address future growth within Tyler and would include a buffer zone to minimize potential conflicts with surrounding development.
- Extension of 12 inch water and 8 inch sewer infrastructure north along US 69. This project would include backbone infrastructure that would facilitate future development in this area.
- Extension of 12 inch water and 8 inch sewer infrastructure along North Broadway Road. Extension of services north to Loop 323 will make development in the area possible.
- Potential purchase of the Tall Timbers Sewer Service System. Acquiring service providers within the City’s service area is a strategy outlined in the Tyler 21 Plan.
- Creation of a south Tyler water transmission line. This infrastructure extension will address future growth in south Tyler.
“Each of these projects play an important role in fulfilling the plan outlined in Tyler 21,” said Tyler Mayor Joey Seeber. “Extending this infrastructure prepares us for future growth, facilitates potential development, and positions the City to be the regional water and wastewater provider.”
The utility bonds that will be issued will be paid for by revenues collected from monthly fees for water and wastewater services – not from property taxes. The City of Tyler has paid off all tax supported general obligation debt, thanks to the implementation of the half-cent sales tax in 1995. General obligation debt is repaid by property tax revenue while utility revenue bond debt is paid for solely from monthly fees for water and wastewater services.
“This is an aggressive plan to take care of our future needs,” said Deputy City Manager Mark McDaniel. “Safeguards are built into the plan to ensure that we do not overextend ourselves and that the proceeds from water and wastewater services will meet the debt service on the bonds.”
On Feb. 22 Standard and Poor’s announced that they have upgraded the City of Tyler’s water and wastewater system bond rating from a AA- to a AA rating. This rate adjustment has significant financial impact to future revenue bonds issued by the City. On the initial $5 million bond, the savings to City coffers will amount to nearly $80,000 due to the improved bond rating. These savings amount to a several hundred thousand dollars with the issuance of the additional $20 million bonds in the next two years.
“The low interest rate currently available makes this a very strategic time to invest in Tyler’s future,” said City Manager Bob Turner. “We are capitalizing on our high bond rating and seizing this opportunity to position Tyler for anticipated growth and development.”
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