HUTTO — They may now be $300 million deeper in debt, but Finance Director Alberta Barrett told the Hutto City Council that the city will save more than $8 million in interest on its new bond issuance due to getting good interest rates at market. The bonds went to market June 6, and council approved the sales at their meeting that evening.
“We received a rate of 4.26 for this issue and the next one is at a rate of 4.33. So over both issues, the general obligation and the certificate of obligation issuances, we had a good savings. We did very well in the market today,” Barrett said.
In March, City Council approved taking on new debt to fund 15 water, wastewater, drainage and street projects. Cost for the improvements came in at $303,731,500. The money will be available July 2 for the city to begin the projects.
That was a sore spot for Mayor Mike Snyder, who questioned why the city was taking on debt at a time when they would have to start making payments before the projects were ready. He also questioned the director regarding previous debt for projects which were long delayed.
“To date I have not seen a public accountability of those funds.
I’ve seen behind the scenes ... but nothing to be able to go to the public and say ‘of the $75 million that was done, here’s where it went,” Snyder said.
“This isn’t the first time we’re talking about this, right. Council has already taken action to direct us to go issue the debt for these projects,” City Manager James Earp told council. “We went and issued the debt. We sold it in the market.
Tonight is about accepting the sale.” The mayor has said he frequently receives complaints from residents about lack of progress on projects that were supposed to be funded by bonds. He questioned City Engineer Matt Rector about the start dates on some of the projects. Rector replied that some projects were planned by council for construction in Fiscal Year 2025 while others had long lead times due to working with other agencies.
Barrett told council that all the existing city funds from the 2022 bonds are earmarked for projects, which have already started.
Council voted four to two to approve the sale, with Snyder and council member Evan Porterfield voting against and member Randal Clark absent.
While the city may now find itself with more debt, as of July some long-awaited projects such as reconstruction of Live Oak Street and County Roads 199 and 137 will be funded and ready to move onto the capital improvements active list.
