Oklahoma City readies $360 million bond sale to support $4.9 billion capital program

Oklahoma City readies $360 million bond sale to support $4.9 billion capital programThe Oklahoma City Water Utilities Trust has authorized preparations for a $360 million revenue bond issuance to refund commercial paper and generate new money for a 10-year capital improvement program that features major pipeline and treatment plant expansions.

The utility plans to spend approximately $2.7 billion over the next five years, part of a $4.9 billion 10-year capital improvement program.

The upcoming $360 million bond sale will allocate roughly $180 million to refund outstanding commercial paper and $180 million in new money for projects.

Major upcoming capital projects include the $540 million Kiamichi project, the $480 million Deer Creek Wastewater Treatment Plant, and $148 million for disinfection upgrades.

The utility is currently reaching peak construction on the Atoka Pipeline project, its largest infrastructure endeavor.

The Trust also approved a dedicated escrow account to hold PFAS class action settlement proceeds, which will be earmarked for the utility's central laboratory.

The Oklahoma City Water Utilities Trust (OCWUT) on August 18, 2026, approved a resolution to develop a financing plan and issue approximately $360 million in utility system revenue refunding and improvement bonds. The move is designed to support the utility's intensive capital improvement program (CIP), which carries a projected cost of $4.9 billion over the next 10 years. According to Dennis Whaley of PFM, the utility's financial advisor, OCWUT expects to spend approximately $2.7 billion over the next five years alone. The upcoming bond sale will allocate roughly $180 million to retire outstanding commercial paper, freeing up capacity for future contract awards, while generating another $180 million in new money to fund ongoing projects over the next nine months. The financing will support several large-scale, multi-year capital endeavors. Whaley highlighted upcoming slow spend-down projects, including the $540 million Kiamichi project, which is anticipated to award about $30 million through 2028 before the remainder is awarded through 2034. Other major line items include the $480 million Deer Creek Wastewater Treatment Plant, $148 million for disinfection upgrades at the Draper and Hefner water treatment plants, and a $115 million expansion of the Draper Water Treatment Plant. Simultaneously, the utility is reaching peak construction on the Atoka Pipeline, historically its largest capital project. After years of long lead times for materials and past legal challenges, the pipeline's construction peak has aligned with the commencement of other major CIP projects, necessitating robust financing mechanisms. To manage the cash flow for these concurrent mega-projects, OCWUT utilizes a $500 million commercial paper program and a $175 million bank note program for appropriation capacity. The planned bond sale will ensure the utility maintains sufficient borrowing headroom. The Trust expects to circulate a mini-RFP for underwriting services in late August, with a targeted bond sale in mid-November and closing in early December. In a separate action during the meeting, the Trust approved the creation of a dedicated escrow account to hold proceeds from a multi-district PFAS class action settlement. While staff noted that the utility's primary reservoirs, Lake Draper and Lake Hefner, have consistently tested below the detectable limit of 4 parts per trillion, the settlement funds will be earmarked for water treatment and the utility's central laboratory, which conducts regulatory testing.