City issues $1 million tax note
BY SUZANNE LOUDAMY Staff writer

During a special called meeting, the Whitehouse City Council approved Ordinance #07- 0130-01 authorizing the issuance of a $1 million, City of Whitehouse, Texas Tax Note, Series 2007.

According to Jed Dillingham, finance director for the city, this tax note will allow the city to proceed with financing another water well, which would have been included with the Certificates of Obligation issue that was intended to finance the park - land purchase and improvements - and the road running through it that the petition stopped last week.

Delaying the well development and placing it on the May ballot for voting would be an extraordinarily expensive thing to do, given that the expected production could reduce water purchases from Tyler by as much as $50,000 to $75,000 per month at the rate they are currently charging the city, said Dillingham.

A tax note can be issued quickly and will get the well project under way, with the possibility of getting it completed and on-line before the summer is out, helping the city through the periods of greatest demand.

"It's called a tax note because the city will pledge its taxing authority to guarantee the debt; however, it will actually be repaid from water system revenues," said Dillingham. "The tax note is good for short term financing. Think of it as interim construction financing."

The city plans to restructure the note for the long term, probably 20 years, within a year.

The projected debt service payments will be about $75,000 annually for 20 years.