Raymondville to sell $1.5 million in bonds to repay low-interest loan

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RAYMONDVILLE — For more than two years, officials here have worked to land a good deal on a state project aimed at improving the city’s water system.

Now, the Texas Water Development Board has approved the $2.59 million project as part of a package that includes a $1 million grant and a $1.5 million low-interest loan.

“The improvements will reduce water loss as well as improve the system’s reliability and efficiency,” the water board stated in a press release.

On Tuesday, city commissioners are set to consider publishing a notice of intention to borrow about $1.5 million through the sale of certificates of obligation to help pay back the state loan, City Manager Eleazar Garcia said Monday.

Garcia said he expects the water board to offer interest rates ranging from 1 to 2 percent on the bond’s 20-year term.

“We got a great deal,” Mayor Gilbert Gonzales said, referring to the low-interest loan. “It’ll reduce what the taxpayers pay for.”

The project

As part of the project, the city will refurbish and repaint its three water towers, Garcia said.

“It will help beautify our city,” Gonzales said.

The towers’ most recent repairs came about 10 years ago, Garcia said.

“This will take them through another 10 or 15 years,” he said of the towers’ proposed make-over, adding each tower would cost $200,000 to $300,000 to repaint.

Through the project, the city will install about 10,920 linear feet of water lines, replacing old galvanized pipes with PVC pipe, Garcia said.

“We’re going to have improved water lines,” he said. “It’s going to have better (water) pressure.”

Gonzales said the city will also replace about 50 of its 178 fire hydrants.

Documentation pays off

For more than two years, officials have been documenting factors such as annual water loss along with financial data such as water and sewer rates and property tax rates, officials said.

“They want to see how stable you are. They want to see if you can pay it back,” Garcia said, referring to the water board’s low-interest loan. “They want to see if your books are in order.”

During the last year, the city lost about 8.7 percent of its water supply as a result of factors including leaks in the system and evaporation, Garcia said.

The city, he said, plans to sell the bonds in September.