The Warrenton Board of Aldermen in July selected an underwriter and approved an agreement to issue $5 million in bonds to finish construction of new sewer mains and upgrade the city’s wastewater treatment plant.

Bonds are a form of IOU that a city sells to a lender, with the promise to repay that financing using public funds – in this case, user fees from the city’s water and sewer services. An underwriter is a company that helps facilitate those bond transactions.

Warrenton is issuing the bonds to pay for construction of a sewer main from Fairlane Circle to the city’s wastewater plant on Willow Road. The city also plans to install a state-mandated UV light disinfection system at the plant. That will complete upgrades that Warrenton voters approved bond financing for in 2014.

During the board of aldermen’s July 6 public meeting, financial advisor Joy Howard with WM Financial Strategies said Warrenton had received a AA credit rating on its bonds, meaning the interest rate on the bonds will be low.

“Of course, interest rates right now are at historical low levels. You’re getting into the market at the perfect time,” Howard commented to the aldermen.

Howard said underwriting firm Hilltop Securities out of St. Louis submitted the best proposal, in terms of interest rate, out of nine firms that had expressed interest in facilitating the city’s bond sale. Aldermen voted 6-0 to accept Hilltop as the underwriting firm.

During the board’s following meeting on July 20, aldermen voted to approve a bond issuance ordinance. According to the text of the ordinance published by the city, the bonds will be paid off over the next 15 years, with the last payment in 2036.

Also in July, aldermen approved $3.3 million in expenditures for materials and construction of the sewer improvements. 

To help repay bonds for sewer network upgrades that have been ongoing since voters approved bond funding in 2014, the board of aldermen has been steadily raising water and sewer service fees by about 4 percent each year.

After the current sewer main and disinfection upgrades are complete, city officials plan to return to voters for approval on a new sewer project as soon as 2023. Due to significant growth in housing and other developments, Warrenton’s wastewater plant is in need of a capacity upgrade to handle the increased sewage load. That project would require its own new round of bond funding.