Charlotte advances $1.1B water and sewer financing package for infrastructure expansion

Charlotte advances $1.1B water and sewer financing package for infrastructure expansionThe massive debt issuance will refund existing notes and provide short-term capital for active water and wastewater projects, driven by rapid service area growth and aging infrastructure needs.

City Council authorized up to $570 million in Water Sewer Revenue Bonds primarily to refund a $505 million Bond Anticipation Note from 2024.

An additional $530 million in construction period financing was approved to fund active design and construction projects over the next 36 months.

The funds will target treatment facility maintenance, infrastructure rehabilitation, and network expansion due to regional growth.

City staff confirmed the financing maneuvers will not require customer rate increases.

The Charlotte City Council has authorized a sweeping financing package for Charlotte Water, approving up to $570 million in revenue bonds and an additional $530 million in construction period financing during its April 13, 2026, meeting. The $570 million bond package is primarily structured to refund approximately $505 million from a 2024 construction period financing program that utilized Bond Anticipation Notes (BANs). The city originally obtained the revenue BAN to fund projects on a short-term basis, with plans to convert it to long-term, fixed-rate revenue bonds at the end of a 24-month period. The package also includes up to $65 million to refund callable 2015 and 2018 Water and Sewer Refunding Revenue Bonds to generate economic savings. To maintain momentum on its capital program, the council also authorized a new $530 million construction period financing program. Structured as a short-term draw program lasting up to 36 months, the financing will support water and sewer projects currently in active design or construction before eventually being converted into long-term bonds. City documents note that utilizing this interim financing strategy reduces interest costs, provides spending flexibility, and promotes rate stability. The capital injection will be concentrated in three core areas: maintaining existing treatment facilities to ensure regulatory compliance, rehabilitating infrastructure that has reached the end of its useful life, and expanding water and sewer capacity to accommodate rapid population growth within the utility's service area. The council action also opens the door for additional optional redemptions, providing for the issuance of bonds to refund up to $633 million in outstanding non-callable bonds from 2018, 2019, and 2020 through tender and purchase, provided the city can achieve debt service savings. City staff confirmed that none of the approved financing actions will require water or sewer rate increases. The measure was approved by the council, with Council Member Victoria Watlington recusing herself from the vote.