The city of Henderson Board of Commissioners on Sept. 12 heard preliminary information about a revenue bond set for a first read in October.
The $15.1 million revenue bond will be used to pay for upgrades and general maintenance at Henderson Water Utilities, Robert Gunter, city finance director, told the Hendersonian after the meeting.
A revenue bond is guaranteed by the amount of money that the specific entity can raise in revenues. In this case, the bond would be backed by the revenues of only HWU, not the city of Henderson.
A general obligation bond is guaranteed by all the revenues, taxes, and other income generated by a governmental body.
The city of Henderson normally issues general obligation bonds to pay for big expenses. In fact, City Attorney Dawn Kelsey at the meeting said this is the first revenue bond that she’s dealt with in her 12 years with the city.
Gunter said the city can issue general obligation bonds up to 10% of the total assessed values of the city’s holdings, which is $1.6 billion. That would allow the city to let out general obligation bonds with a value of up to $160 million. Currently, the value of the general obligation bonds that the city has out is $88.6 million.
Gunter said the city in upcoming years will issue general obligation bonds for other projects, such as the construction of the new fire station.
He said the city did not want to issue general obligation bonds for the HWU work because it needs to keep availability for this later bonding.
Kelsey said there will be a work session on Oct. 17 to discuss the revenue bond for HWU improvements and a special called meeting when a first reading will occur.
