The Levelland City Council continues to focus on the longterm sustainability of the community after discussions regarding the wastewater treatment facility and possible broadband expansion.
The approval and authorization of publication and posting of notice of intention to issue certificates of obligation, including the adoption of Resolution No. 22-36A was on the agenda for a second time after failing to meet the 60 percent approval rate in the last regular meeting. In the last regular meeting, Council Member Jim Myatt was absent. Council Members Breann Buxkemper and Michael Stueart voted in favor of the approval of the notice of intention.
Council Member Mary Engledow abstained from voting on the agenda item during that time. City Manager Brandon Anderson explained that the city charter requires a 60 percent majority to move forward.
Managing Director at Hilltop Securities, Jason Hughes spoke to the council and reiterated the process and options that were at their disposal similar to the last regular meeting. Hughes explained that the notice of intent is merely the first step in the process to issue certificates of obligation which is required to the state.
The process will allow the council to issue up to $20 million in certificates but assured the council that going below the amount is completely possible. However, the council cannot issue an amount more than $20 million. The certificates are marked for 20-year debt. Hughes assured the council that the amount of time is firm and will not return in the future with an adjusted time of 30-to-40-year debt plans.
As it stands within the notice of intent, the approval CO sale would be scheduled for December 5.
Between now and the sale date, Hughes and his team will be putting together an offering document that will be used to go out and sell COs to investors throughout the United States.
To help sell the certificates, a credit rating will be used along with the offering document to help educate investors on the city. Throughout the entire process, Hughes emphasized that communication will be important for all parties. Once the sell date is two weeks away, Hughes and his team will begin to lock in.
At that point, the council can drop the sell and take more time weigh options.
“What we cannot have happen is me coming in on December 5, with a completed transaction and say we priced the COs today, here is your payment and you say no at that point,” explained Hughes. “That is well within your legal right, however, that creates significant problems if you go to sell dept in the future in the open market.”
Hughes added that the example is not a deterrent from changing council minds and wanting to hold off or go a different direction, but the sooner that is done, the better. Waiting until the very last second would provide a lot of issues.
Council Member Engledow also spoke about the previous regular meeting where she abstained from voting on the item. She explained that at the time she did not feel she had a solid understanding on the matter.
Given time to process and gather more information on the topic, Engledow felt more comfortable coming into Monday’s meeting to discuss the issue and take part in the voting process.
“Obviously you have taken the time to speak to us and I appreciate that,” said Engledow. “I wanted to gather more information and develop a better understanding of what is going on. I can now say that I have more of a clear understanding of what we are doing.”
Hughes is projecting a 5.8 percent tax rate but is cautious about giving numbers as the rate can fluctuate.
Once December 5 rolls around, if the council keeps the date, Hughes and his team will price COs that morning and will lock in those rates. Once that happens, it will be subject to the council’s approval that evening.
After giving an example of a client deciding to hold off on the sale because the market affected the rates, Hughes assured the council that it is possible to postpone the sale for a month or so to see if rates fall or if they are going to have to sale to fight off increasing rates.
That type of decision is well within the councils’ abilities, but Hughes explained that it would be better to have that decision in mind closer to December 2 for reference than the actual sell date on December 5.
Buxkemper made the motion to approve the resolution with Stueart seconding the motion. There were no council members opposed.
For the bond process, the council is not required to issue all of the $20 million as that does not dictate what type of plant is built. The bond process is merely the funding mechanism for the project. Earlier internal meetings with council members helped the council to move quickly and get the bonds initiated sooner rather than later with climbing rates and would allow the council to refinance quicker in the future.
Following the approval, the council moved to allowing the city manager to negotiate scope, fee, and contract with Parkhill for engineering services for the design, pricing, bidding and construction of the wastewater treatment plant.
Parkhill Civil Engineer Daniel Albus was in attendance to answer any questions the council may have.
City Manager Anderson explained that a preliminary drawing had already been presented with two options for a new plant. Additionally, he mentioned that there is a third option that has been discussed internally and those discussions will remain internal as there are some council members that would like to revisit the topic in the future.
To move forward with the two options that have already been presented, the negotiations will need to happen and in turn, that will narrow down a price tag that roughly shows what the plant will cost.
The city has received estimates of what a plant would cost, but the project scope and getting the building process rolling would provide a clearer picture in regard to price for the council.
Anderson said the engineering record has been with Parkhill for the better part of 75 years. To change course, the city would have to rebid out for other engineers.
“I feel confident in the expert advice we have received,” said Anderson. “Parkhill and Albus have been very upfront and forefront with the issues we have at that plant. I know he wants to be a part of the solution.”
Myatt asked if Assistant City Manager Joe Cavazos would be a good fit with the role as his responsibilities fall in line with the projects.
Anderson had no issue with bring Cavazos in as well and said they work well together, and he believes they can get the job done.
The board approved of the item unanimously.
Shifting their focus to the future broadband needs for the city, Anderson said he had been having internal discussions with Levelland Chamber of Commerce President Mary Siders and Levelland Economic Development Director Justin Balderas.
Providing better broadband for Hockley County and Levelland businesses and residents has been an on-going discussion with the local providers.
Currently, a record number of funds from the federal government have been committed to broadband infrastructure upgrades nationwide.
Anderson explained that having a comprehensive broadband study will put the city in a better position for those funds as it comes times to fill out the necessary documents, there will most likely be a box asking if they have done a community assessment of the current state of things.
For this agenda item, Anderson proposed a study to be done by Connected Nation who is a non-profit. The quote for the City of Levelland is listed at $22,610. Anderson also added that there is a 50-50 cost share opportunity.
Anderson said himself and Balderas can continue to look at that option, but the funding for the study will be used with ARPA funds.