The Kerrville Public Utility Board heard a request Wednesday from the city of Kerrville to restructure repayments on a $7.5 million loan it made to the city last year to help finance construction of a wastewater retention pond.

Facing the need to spend millions starting in 2018 on a solution to a water supply quality issue and on a new wastewater lift station, Kerrville is looking to free up money for those projects and others.

“The city council has an approved limit of 35 percent on debt-to-total-revenue for the utility system and they are projected to exceed that in 2020,” said KPUB CEO/General Manager Mike Wittler.

“The most logical resolution of the city’s request would be to extend interest-only payments by three years and extend the overall term by three more years,” said Wittler.

That would mean the city would only pay interest for the first six years of what would become a 13-year loan.

Wittler said he did not anticipate any problems for KPUB, but would get feedback from rate consultants before bringing the proposal back to the board for action, which would probably be in December or January.

KPUB Chairman John Sample said he had no problems with the specific request but said the city and the utility need to be clear about each other’s plans and potential needs.

“We have a (loan) contract that pretty well carries us out through 2023,” Sample said. “The market is changing so quickly, and it’s unregulated. If we ran into a year when we needed to borrow money and we couldn’t borrow money, because the city had already borrowed money, or already planned to, there could be problems.”

“We need you to understand what our needs might be, and we need to understand where you are so that we don’t run into a conflict,” he said

Kerrville City Manager Mark McDaniel said the city was not in a “big rush,” but it needs to have the request acted upon so that it can move along with plans for major infrastructure projects.

Kerrville Mayor Bonnie White, who serves on the KPUB board, recused herself from the discussion.

 

 

 

Sniffen, John. “KPUB gets payment restructure request from city of Kerrville.” Kerrville Daily Times, 16 Nov. 2017, dailytimes.com/news/article_2b15807a-cad9-11e7-98aa-3f6382ad845f.html.