As interest rates drop, the city of Granite Shoals is poised to save residents tax money on two fronts.
City leaders told the City Council during the April 21 meeting that it’s almost time to issue bonds for water treatment infrastructure improvements as interest rates fall closer to the 2-percent mark. The city is also looking at leveraging the lower interest rates to save money on current debt.
“We’re moving forward to securing bond money,” City Manager Jeff Looney said. “The second part is we’re going to consolidate our debt to get a better rate and saving around a hundred thousand a year. But that’s not a hard number.”
Looney said the city could land interest rates as low as 2 percent, compared to the 3-4 percent officials estimated during the bond election’s process. Granite Shoals voters approved the $7 million bond packages in November 2019. The bond focuses on three things: a new water tower, water plant improvements, and waterline maintenance.
Shortly after the coronavirus pandemic set in, interest rates were rising, Looney said, but that’s changing.
“Interest rates are going down again,” he said. “We know pretty much what we have to spend on the plant and the tower. We are locking in costs for the plant and tower.”
The projected costs to the water plant and the new tower are $2 million each.
By getting lower interest rates, city officials predict they will save money on the water tower construction and water plant improvements. Those funds will then be moved to the waterline projects, Looney said.
The city is replacing the current 150,000-gallon water tank with one that holds 350,000 gallons. Before construction can begin on the new tower, the city needs to acquire land for the structure.
TRC Engineers Inc. of Austin, the firm the city hired to manage the project, is on schedule, Looney said.
“TRC is continuing to draw up the plans for improvements to the plant and securing what we’re going to do on the water tower,” he said. “The engineers are doing the work. We’re getting ready to get our bonds out to do the work. We’ll probably have our money in place in June.”
He believes construction won’t start until September or October. Looney added that the city has a $300,000 Texas Department of Agriculture grant to help pay for upgrades to the water treatment plant.
Starting this week, the road department will be making repairs to Prairie Creek Road using funds from the 2017 bond.
“There were problems with the road after it was constructed, such as cracking, we want to repair,” Looney said.