Lakeway police station bonds sold
City will pay the bonds over 25 years at interest rate of 3.044 percent.
The city of Lakeway accepted a bid for the bonds that will pay for the new $23 million police station narrowly approved by voters during the May election.
The bonds will be paid by the city over 25 years at an interest rate of 3.044 percent, resulting in a total cost of about $34 million.
Jennifer Douglas with Specialized Public Finance told the City Council during the meeting Monday meeting that the city was saving about $10 million in comparison with their projections made before the election.
The city initially projected that the average property owner in Lakeway, based on an average home value of about $472,000, would pay $10.27 per month more in property taxes to support the construction of the new police facility — assuming a bond interest rate of 4.48 percent and a payoff period of 30 years. Those estimates were used as a baseline in city presentations leading up to the May 6 election. At the actual interest rate of 3.044 percent, the average homeowner will pay $9.24 per month, City Manager Steve Jones said.
“It’s a bit of a rally,” Douglas said. “The interest rates have been higher than they are today (so) it’s a good time to sell . ... The range (of interest rate offers) was from 3.04 to 3.72, which is very broad, so it’s nice to have a competitive sale so you can see who is the most hungry.”
The City Council unanimously approved the ordinance levying the property tax in support of the bonds and issuance of the bonds.
The total cost of a land purchase and construction of a police station — plus construction of the extension of Lohmans Spur — was projected to cost $23 million. Jones said last week the city would like to start construction on the police station on an “aggressive” schedule in November. Jones said he hoped to close on the property in early October.
A letter of intent has been finalized between the city and developer Haythem Dawlett. A land purchase agreement has been drafted but hasn’t yet been signed, Jones said. He said the city had a “contingency plan” in case Dawlett didn’t close on the land, so the city could purchase the acreage from the Lakeway Municipal Utility District.
The Lakeway MUD has not finalized a contract to sell the land to Dawlett, though the two parties were organizing meetings on the contract, according to emails obtained through an open records request. MUD General Manager Earl Foster said that Dawlett indicated to MUD officials that land contract extensions would be paid by the developer until August.