Friendswood City Council has approved plans to issue $20.4 million in bonds to improve the city’s water and sewer systems. This is the first time since 2021 that Friendswood has taken on major utility debt, and it will help fund important infrastructure projects.
What Will the Bonds Fund?
The bonds will provide $20.5 million for water and sewer projects, along with $1.4 million for a reserve fund. These funds will support critical upgrades identified in the city’s recent utility rate study.
City Manager Morad Kabiri explained that Friendswood is under contract with the city of Houston for water from the Southeast Water Purification Plant and wastewater services from the Blackhawk Wastewater Treatment Plant.
Why Now?
Friendswood’s working capital for water and sewer services has dropped to just $143,000 above the required 90-day reserve. This made it necessary for the city to raise money through bonds. Officials have already adjusted utility rates to cover the costs of paying back this new debt.
Bond Details
The bonds are expected to be priced in March and finalized by March 27. Current market conditions suggest an interest rate of about 4.35%. John Robuck from RBC Financial Securities presented these details to the council, explaining how the bonds will support the city’s water and sewer system improvements.
The $20.4 million bond issue marks an important step for Friendswood’s future, ensuring that the city’s water and sewer systems are well-maintained and ready to support its growing population. With necessary funds secured, Friendswood can begin critical infrastructure projects while maintaining its financial stability through adjusted utility rates.
