• November 24, 2014

Killeen set to vote on water plant contract

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Posted: Saturday, February 8, 2014 4:30 am

The Killeen City Council is slated to vote Tuesday on an agreement with Bell County Water Control and Improvement District No. 1 for the financing, design and construction of a water treatment plant on Stillhouse Hollow Lake.

The proposal will give the city an additional 10 million gallons of treated water per day and is expected to meet the city’s growing water needs for another two decades. It adds to the current 32 million gallons per day from Belton Lake.

The Texas Commission on Environmental Quality requires a city to begin planning for future water usage once it reaches 85 percent of its peak treatment capacity, a mark Killeen nearly hit in 2011.

City Manager Glenn Morrison said the city studied options with WCID-1, Kempner Water Supply and Central Texas Water Supply Corporation.

Killeen has a contract with WCID-1 for treated water from Belton Lake at a rate of 62 cents per thousand gallons, Morrison said. It will charge the same rate for water from the Stillhouse plant.

Morrison said Kempner Water Supply rates were 75 cents per thousand gallons and Central Texas Water Supply rates were 69 cents per thousand gallons.

Morrison said one of the most important factors in moving forward with a provider is the issuance of debt services. WCID-1 agreed to issue the debt at its current rate of 62 cents per thousand gallons, whereas Central Texas and Kempner rates were nearly four times that amount at $2.62 and $2.66 per thousand gallons.

“(That’s) a very big difference,” Morrison said. “The reason we ask the question about issuing debt is to keep us in line with our water and sewer master plan.”

Another deciding factor was interim water, he said.

All three companies were able to provide 2 million gallons of water while the plant is constructed, but Kempner and Central Texas were both on a take-or-pay basis while WCID-1 allows the city to only pay for what it uses.

The Stillhouse plant will serve neighboring cities as well as Killeen. The city is expected to fund nearly $30 million for the plant’s construction.

Martie Simpson, city finance director, said in November the total debt service is a little more than $87 million, which includes existing debt and debt that will come into play once the city enters negotiations on the new treatment plant.

Because of the city’s “extremely healthy” water and sewer fund, Simpson said financial advisers determined it would be in the city’s best interest to put in an initial cash outlay of $5 million for the water plant’s construction.

She said because of the water and sewer fund’s balance, it isn’t necessary to issue capitalized interest — interest incurred during construction — for the project.

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1 comment:

  • Alvin posted at 11:54 am on Sun, Feb 9, 2014.

    Alvin Posts: 222

    I was going along there pretty good until I read 'the city is going to outlay $30 million for the water plant and then pay the WCID-1 $0.62/thousand gallons. Now that seems like a 'you get your cake and eat it too' scheme too. It seems like it is pretty lopsided when the city is going to fund the plant to be built and then pay a fee ($0.62/thousand gallons) as a fee for the use of the facility. I can't remember what the life of this contract is.
    And the city is going to incur, including this and future indebtedness, nearly $87 million. Wonder what the total indebtedness will be when the city starts incurring debt for the new waste water lines/plant, new water tank, to service the 3750 to 4000 new homes that are to built, outside of the city boundaries? Is this included in the nearly $87 million indebtedness.
    I notice that 'we almost reached the plateau of 85% in 2011'. I seem to remember that it was stated that we were 'a couple of hundred homes short of the number of meters being allowed'. That number is not bantered around anymore. Wonder why?