The Denison City Council voted Monday to move forward with issuing $7 million in debt to finance the renovation of the former Bank of America Building on Main Street and improvements to the city’s water system. The $3 million bank building renovations are a part of plans to convert the 1970s-era bank building into the new Denison City Hall.

“By adopting the ordinance tonight, it is the final step in our bond process,” Marti Shew, representing bond council Hilltop Securities, said Monday.

City Manager Jud Rex said the city was able to secure a 2.62 percent interest rate on the 20-year debt. This remained well below the current market rate of about 3.77 percent, Shew explained. Rex said the city was pleased with this rate, as it has remained consistent despite changes in national rates and trends.

“It is pretty much the same rate we got last year with our water and sewer bond rates,” Rex said prior to Monday’s meeting.

The city announced its intention to relocate city hall to the bank building in September 2015. That came just one month after Bank of America closed its Denison Branch and nearby motor bank on Chestnut Street. In the finalized deal, the city agreed to demolish the motor bank, exchange its current city hall building at 500 W. Chestnut and pay $400,000 for the former bank building.

In March, city officials said the budget for the construction phase of the project was currently $2.1 million, with design and planning expected to cost about $168,000. The budget also includes $300,000 for “fixtures, furniture and equipment,” Rex said Monday. Those upgrades include new technology and security equipment, he said.

A $260,000 owner’s contingency and $133,000 unanticipated cost escalation are also included in the budget to cover any increases in price or unexpected costs that may come up throughout development.

“When we put this budget together, it was the end of 2015 and we anticipated that the costs will go up,” Rex said in March.

The city is expected to receive a guaranteed maximum price for the project later this summer.

About $4 million of the debt issued Monday will be used for a number of system improvements to the city’s water infrastructure. This year represents the third year in a proposed five-year series of improvements to that system.

For 2017, Denison is proposing to invest in about eight sewer line replacements throughout the city. The city is also expected to undergo a separate series of water line improvements throughout Denison as well, Rex said. Other projects include work, painting and rehabilitation on many of the city’s water towers and storage tanks.

Rex expects Denison will issue additional debt in 2018 for the fourth year of system upgrades, but said he was uncertain of the amount at this time. Among the projects that could see work in 2018 is construction of a proposed water pumping station on Lake Texoma. That would replace the city’s current, aging station with a new facility capable of increased capacity.

As the project will be completed under the guidance of the U.S. Army Corps of Engineers, Rex said the review and permitting process could take between six and 12 months.

For his part, Denison Mayor Jared Johnson said he was proud of the city staff in their efforts in acquiring the funds needed to complete these projects.

“I think it shows a pattern that has continued from last year,” Johnson said about the favorable rate. “I offer my congratulations to staff and past councils for ensuring our city’s financial health.”