New Water Tower, Refinancing Bonds

Construction has begun on Lantana’s new water tower, but it will be a while before cranes start operating and residents can see its steel frame rising skyward.  Kevin Mercer, General Manager of the Lantana’s fresh water Supply districts, said that much of the crucial work of water tower construction is done underground, with extensive drilling and excavations necessary to pour the footings and foundation.  He notes that since the tower when complete will hold up to 5 million pounds of water it has to be built on a stable base.  The new Tower will also have to be connected to the water lines which provide water to both DCFWSD 6 and 7.  Estimated time to completion is nine months.

Lantana’s existing water tower will be removed to make way for a significant retail development including a supermarket and other stores.  In exchange for the land on which the existing water tower sits, the district is receiving a new parcel of land and the new tower, almost identical to the existing structure except a few years newer.

The district boards will conduct a joint meeting next week, one of four such sessions held each year in which the two boards can discuss items of mutual responsibility like construction of district offices and the water tower.

Mercer said that the joint meeting will be conducted at 5:30 p.m. on Tuesday.  An individual meeting for District 7 will precede the joint meeting, starting at 4 p.m.   At 7:30 Tuesday, District 6 will hold its individual meeting.  Mercer told Lantana Living interest rates for municipal bonds have been favorable and there might be an opportunity to issue debt to refinance previously issued bonds.   The boards acted last month to empower a committee including Mercer to approve a rate on negotiated interest rates for refinancing bonds, should a favorable offer be received.

According to Richard Harned, the districts’ comptroller, board action will allow but not require the committee to take action to issue bonds to refinance existing debt.  The districts’ bonds have a provision that allow them to be recalled and replaced with new debt, but the bonds can only be recalled once.  Because interest on debt is one of the major costs for the fresh water supply districts, action could potentially save the districts a lot of money.  But because there are costs associated with issuing new bonds, the process will begin only if savings are 30 basis points or more, Harned said.  The committees with power to see a strike price and reissue bonds include Mercer, Board President David Ware and Treasurer Todd Beggs in District 7, Secretary David Baird and Treasurer Kurt Sewell in District 6.  Harned said that the recent rise in the stock market has attracted investor funds and the bond market is moving away from a favorable strike price, but fluctuation in the markets may still provide an opportunity over the next six months.

Generally the water supply boards meet on the second Thursday of each month, but because of Spring Break it was easier to get a quorum from both boards on the third Tuesday of this month.  The agenda for Tuesday’s meeting will be posted on the Lantana Fresh Water Supply District Website at http://lantanatx.org/meeting-notices/