Title
2026 Water Sewer Revenue Bonds and Construction Period Financing
Action
Action:
A. Adopt bond orders and resolutions authorizing and approving issuance of Water Sewer Revenue Bonds and Revenue Bond Anticipation Notes and calling for the execution and delivery of various documents necessary to complete the sale,
B. Provide for the issuance of Water Sewer Revenue Bonds in an amount not to exceed $570,000,000 to refund outstanding 2024 Bond Anticipation Notes and callable Water and Sewer Refunding Revenue Bonds series 2015 and 2018,
C. Provide for the issuance of Water Sewer Construction Period Financing in an amount not to exceed $530,000,000,
D. Provide for the issuance of additional Water Sewer Revenue Bonds for optional redemption to refund all or a portion of the city’s outstanding Water and Sewer System Refunding Revenue Bonds for approximately $633,000,000 Series 2018, Series 2019, and series 2020 through tender and purchase of such bonds, and
E. Adopt a budget ordinance appropriating $1,203,000,000 in revenue bond proceeds to the Charlotte Water Revenue Bond Debt Service Fund.
Body
Staff Resource(s):
Matt Hastedt, Finance
Angela Charles, Charlotte Water
Melissa Westfall, Charlotte Water
Explanation
§ At the April 13, 2026, Business Meeting, City Council authorized the application to the Local Government Commission for debt issuance to fund Charlotte Water Capital Investment Plan projects and to refund existing debt.
§ This action provides for the issuance of up to $570 million comprised of the following:
- Refunding of the 2024 construction period financing, which utilized a Bond Anticipation Note (BAN), of approximately $505 million. In 2024, the city obtained the BAN to fund projects on a short-term, interim basis and planned to convert it to long-term, fixed rate revenue bonds at the end of the 24-month construction period.
- Refunding of the callable Water and Sewer Refunding Revenue Bonds series 2015 and 2018 up to $65 million for economic savings.
§ This action also authorizes a new construction period financing program for up to $530 million to provide for the short-term financings for projects in active construction or design.
- Construction period financing such as Bond Anticipation Note (BANs) and Commercial Paper (CP), are commonly used debt financing tools used by municipal governments to help provide short term interim financing to capital projects.
- Utilizing Construction Period Financings reduces interest cost, promotes rate stability, and provides flexibility in the timing of the spending.
- The 2026 Construction Period Financing of up to $530 million is planned in two steps: a short-term construction period draw program lasting up to 36 months, which will then be converted into long-term, fixed rate revenue bonds.
§ This action also provides for the issuance of additional Water Sewer Revenue Bonds to be used to refund all or a portion of approximately $633,000,000 bonds outstanding for the city’s non-callable Water and Sewer Refunding Revenue Bonds series 2018, 2019, and 2020 through purchase of such bonds upon tenders but will only be issued if and to the extent the city is able to achieve debt service savings.
§ The revenue bonds and construction period financing will provide funding for projects concentrated in three areas:
- Maintenance of existing treatment facilities to ensure reliable treatment process and regulatory compliance;
- Rehabilitation and replacement of existing water and sewer infrastructure that has met its useful performance life; and
- Water and sewer infrastructure capacity and expansion due to growth of the service area.
§ These actions do not require rate increases.
Fiscal Note
Funding: Charlotte Water Revenue Bond Debt Service Fund
Attachments
Attachment(s)
Bond Orders
Resolutions
Budget Ordinance