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COVID-19: Local Governments Left in Dark on Terms for $1.26 Billion in Water Infrastructure Funding

Feature Photo: Nolte Island Recrational Area, one of three parks controlled by the Guadalupe Blanco River Authority. Image: Google Streets.

Posted: 4-9-2020

by Adolfo Pesquera

Austin (Travis County) — The Texas Water Development Board agreed to an eleventh hour amendment to the 2020 cycle state water infrastructure fund, effectively leaving local governments with pending applications in the dark about the financial terms for their respective subsidies.

At the recommendation of Executive Administrator Jeff Walker, the standard rates of interest on nine project applications brought by eight regional public entities were set aside, to be determined later.

Their total project value is $1,259,560,000.

The action taken was not on the document posted for public consumption, said Kimberly Rhodes, who made the Thursday morning presentation. Rhodes is the state programs coordinator for the State Water Implementation Fund for Texas (SWIFT).

The subsidy rates stated in the resolution were suspended at the last minute, by attachment. Source: TWDB.

The decision to put off stating the percentage of subsidy was made because of the turbulence in the municipal bond market caused by the coronavirus, Rhodes explained.

TWDB Chairman Peter Lake, as he appeared in a virtual meeting held April 9.

TWDB Chairman Peter Lake recognized the necessity of giving the executive administrator this flexibility, as well as the inconvenience it causes local governments.

“In the last month, the global markets have fallen farther and faster than at any time in history,” Lake said. “It means that now is one of those times when we’re going to have to start making tougher decisions. The only certainty that we have today is that the future is highly uncertain.

“I’m tremendously confident in the ability of our staff and the ability of the trust company to manage the SWIFT program through this crisis, … but today, I don’t  think it’s financially prudent for us to set the terms and amount of the subsidization.

“I realize this lack of visibility could be frustrating for our customers and our borrowers,” he said.

One of the applicants, with almost $11.4 million in loans pending, is the Seguin-based Guadalupe Blanco River Authority (GBRA), which provides services to municipalities, municipal utility districts and private contractors in 10 Central and South Texas counties.

Darrell Nichols, GBRA’s senior deputy general manager, begged in vain for a commitment on a specific rate or dollar amount subsidy.

Nichols pressed upon the TWDB members that the participation of the boards of the municipalities and other clients down the chain is absolutely essential, and they cannot play their role unless they know whether they must adjust rates for their water users.

“When do you anticipate having guidance,” Nichols asked.

“We’ll give guidance as soon as we feel comfortable we can find the right balance,” Lake responded.

The final applications are due May 11. Executive Administrator Walker said applicants can apply “as they wanted to, and we’ll evaluate as to whether we can do that or not.”

This list of public entities and their projects that are applying for SWIFT funding.

In other business, the TWDB approved financial assistance for the following projects as follows:

  • $2,200,000 to the City of Alto (Cherokee County) for wastewater system improvements
  • $5,202,068 to the City of Rotan (Fisher County) for water system improvements
  • $1,140,000 to the City of Troup (Smith and Cherokee counties) for a wastewater plant rehabilitation project
  • $1,830,197 to the Westwood Shores Municipal Utility District (Trinity County) for wastewater treatment plant improvements
  • $1,340,000 to the Cedar Bayou Park Utility District (Harris County) for a Hurricane Harvey disaster recovery project
  • $2,195,000 to the City of Newton (Newton County) for water system improvements
  • $1,800,000 to the Village of Surfside Beach (Brazoria County) for water system improvements
  • $3,400,000 to the City of Blanco (Kerr County) for water system improvements
  • $500,000 to the City of Kerrville (Kerr County) for a disaster recovery project

adolfo@virtualbx.com

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About the Author:

Adolfo Pesquera (Reporter/Editor) is a veteran news journalist. He has worked for Hearst Corp., American Lawyer Media, News Corp and Freedom Communications. His work has been published in newspapers and magazines across the USA. He is a journalism graduate of UT-RGV. He writes, edits and creates digital pages for VBX.

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