DALLAS - By only three votes, Andrews County voters approved a $75 million bond referendum on Saturday that authorizes officials to issue general obligation debt for a low-level radioactive waste disposal site in the sparsely populated West Texas county.
The final tally had 642 votes cast in favor of the bonds to be issued on behalf of Waste Control Specialists Inc. and 639 against the measure.
County Judge Richard Dolgener said opponents filed a petition Monday and a recount is underway.
"We're doing it right now and will complete it hopefully this week," he said.
Waste Control Specialists will sell the county $75 million of assets and then lease them back to cover principal and interest on the debt. WCS also will deposit $75 million of stock of its parent company, Valhi Inc., into an escrow account, and pledge all of Valhi's NYSE-listed stock to back the facility.
"We'll make it very certain the county will never be on the hook for these bonds," WCS chief executive William J. Lindquist said in promoting the facility.
The company also agreed to reimburse the county for the costs of the election and put $6.3 million annually into an escrow account to provide the debt service on the bonds.
Last month, Chuck McDonald, spokesman for Waste Control Specialists, said "it would be extremely difficult to do traditional financing for this project and one of the only viable options was to go this municipal bond approach."
About two months ago, Standard & Poor's lowered Valhi Inc.'s corporate credit rating two notches from B-minus to CCC. Analysts said the downgrade reflects "a potential covenant violation related to one of its facilities and our heightened concern about the company's liquidity and financial flexibility as it navigates through a challenging business environment this year."
Andrews County rarely issues bonds, has no debt outstanding, and isn't rated by Fitch Ratings, Moody's Investors Service or Standard & Poor's.
The county has hired First Southwest Co. as financial adviser for the bond sale. Fulbright & Jaworski LLP will serve as bond counsel.
Andrews County is set to receive 5% of the gross revenue of the facility, which is estimated to be roughly $10 million to $15 million annually once the plant is fully operational.
The current annual tax revenue of the county is about $13 million, according to McDonald.
In January, the Texas Commission on Environmental Quality approved the company's application to build the plant. Construction is expected to begin in June and take about 13 months.
There are currently three low-level radioactive waste sites in the country, but the Texas plant is the first to be built in a few decades.
The Nuclear Regulatory Commission defines low-level radioactive waste as items that "become contaminated with radioactive material or have become radioactive through exposure to neutron radiation."
Those items often include "contaminated protective shoe covers and clothing, wiping rags, mops, filters, reactor-water treatment residues, equipments and tools, luminous dials, medical tubes, swabs, injection needles, syringes, and laboratory animal carcasses and tissues," according to the NRC.
