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The Texas Water Development Board (TWDB) today approved financial assistance totaling $16,995,860 for water, wastewater, and flood projects. The full agenda of this meeting can be found here. The archive of this meeting can be found here.

This report is intended to give you an overview and highlight of the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Item 1: Discussion regarding outreach efforts and activities by the Board

  • Director Stepney – Met with Senators LaMantia, Eckhardt, and Springer and attended the Water for Texas Conference; met with Texas Cattle Feeders Association
  • Director Peyton – Attended the Water for Texas Conference. Met with Senator LaMantia, Hancock, and Alvarado
  • Chair Paup – Visited Eagle Pass, Texas and Laredo, Texas

 

Item 2: Consider authorizing the Executive Administrator to exercise the option to renew the existing contract with Hilltop Securities Inc. for a one-year term beginning March 1, 2023, at a cost of $980,000, and authorizing up to two additional one-year renewal options per the contract terms, for a total contract amount not to exceed $4.9 million

  • Contract at end of year one expired February 28, 2024
  • Director Peyton – How long has Hilltop Securities been the Financial Adviser
    • Since 2023
  • Director Peyton – $4.9m cover the whole 5 year period or individual one year extension?
    • $980,000 per year for a full year; if we get predictive bond deals may have to request an amendment for a different amount
  • Item 2 approved

 

Item 3: Consider authorizing the Executive Administrator, Chief Financial Officer, General Counsel and Development Fund Manager to take all necessary actions for the issuance, sale, and delivery of State of Texas Water Financial Assistance and Refunding Bonds, in one or more series; and approving the selection of financial advisor, bond counsel, disclosure counsel, senior managing underwriter, and co-managing underwriters for the negotiation of the bonds

  • Item seeks to initiate process for a General Obligation Bond sale for new financial assistance for DFund and EDAP
  • This will refund outstanding water financial assistance bonds
  • If plan authorized, there will be a formal confirmation of the bond deal next month (March, 2023) presenting it to the board
  • Director Stepney – It is my understanding that we won’t move forward unless there is a 2% savings, is that correct?
    • On the refunding our policy we can refund bonds with a less than 2% savings in certain circumstances for program goals, generally we want 2% savings. Given market volatility we may not pull the trigger on this if it dips below 2%
  • Item 3 is authorized

 

Item 4: No action requested. This is a briefing item regarding material changes to contracts for goods and services executed during the first quarter of fiscal year 2023, and the contract and performance report for the first quarter of fiscal year 2023

  • Report is on material changes for goods and services awarded during the first quarter of FY 2023; also included is a report covering the performance and contract monitoring
  • Director Peyton – Tracked percentage change a flat dollar amount and anything above that amount gets grouped into material change?
    • Statute requires report defines material changes as those that extend the length or postpone the completion of a contract by 6 months or more or increase the total consideration to be paid by a contract by at least 10%

 

Item 5: Consider adopting and authorizing the publication of amendments to 31 Texas Administrative Code §358.6 relating to water loss audits

  • Current water loss thresholds are based on data from the 2010 water loss audits
  • New thresholds are based on quality control, statewide data, and audits from 2015 – 2020, and are basically the median value of that data
  • Proposing to change the metrics on connection density rather than population, which is in line with the industry standard
  • Thresholds are only applying to utilities that are applying for financial assistance for a water project
    • If they are above its threshold they must include funds to mitigate their water loss
    • If they are or planning to address their loss, we request a waiver for them to do so
  • New thresholds would be effective on applications received after July 1, 2023
  • Amendments include new requirements for water loss validation, a process currently used by several states across the country
    • Can assist utilities and the state and can better direct water loss mitigation resources and funding
    • All utilities receiving funds from the board to have their annual water loss audits to be validated starting January 1, 2025
    • TWDB validates the audits but other entities might be able to as well if it follows guidelines (establishment TBD) and if the person is certified to conduct validation.
    • Validation services begin later this year
  • Director Stepney – Utilities can utilize our validators do it through a third party?
    • We are bringing on additional staff and are training them to validate with the utilities
  • Director Stepney – When will the guidelines be available?
    • Next couple of months, between now and when it becomes required
  • Item 5 passes

 

Item 6: Consider adopting and authorizing publication of additions and amendments to 31 Texas Administrative Code Chapters 363, 371, and 375 relating to the use of alternative project delivery methods for construction projects financed by the Texas Water Development Board.

  • Recommends adoption of the amendments as proposed and publishing of these rules
  • Item 6 passes

 

Item 7: Consider approving by resolution a request from the Greater Texoma Utility Authority approving amendments to outstanding bonds purchased by the Texas Water Development Board and delegating authority to the Executive Administrator and his staff to take any actions necessary to facilitate the request

  • December of last year, GTUA submitted request for authorization to amend three series of outstanding bonds that financed water storage and utility system improvements for the city of Gunter
  • City now seeks to sell utility system to Mustang Special Utility District through an asset purchase and operations agreements between Gunter and Mustang SUD
  • Outstanding bonds are secured with a pledge of contract revenues established through a contract between GTUA and the City of Gunter
  • Requesting to amend the outstanding bond applications it has with the water board to substitute themselves with Mustang SUD once purchased
  • Bonds may be amended with permission of the board
  • GTUA received confirmation from the Attorney General’s office that these proposed amendments would not be a reissuance underneath the state securities law
  • Proposed amendments would not merit a reissuance under federal tax laws as well
  • GTUA still remains responsible for the bond in writing but Mustang SUD will be handling the bond
  • Item 7 passes

 

Item 8: Approve by resolution a request from the Tri-Try Water Supply Corporation (Stonewall County) for $300,000 in principal forgiveness from the Drinking Water State Revolving Fund for planning, design, and construction of a water system improvements project

  • Existing pump not up to code and is dilapidated; TCEQ has also issued an enforcement order for lack of adequate storage at the old pump station
  • Corporation would construct a new pump station that would include two booster pumps, a pressure tank, and an underground storage tank, resolving the enforcement order and bringing them up to standard
  • Corporation qualified for principal forgiveness for the entire project under the drinking water very small system funding option
  • Project schedule – Closing: May 1, 2023. Feasibility Report: September 29, 2023. Design Phase Completion: November 30, 2023. Start of Construction: February 1, 2024. Construction completion: August 30, 2024
  • Item 8 passes

 

Item 9: Approve by resolution a request from the City of Leonard (Fannin County) for $5,696,000 in financial assistance consisting of $2,850,000 in financing and $2,846,000 in principal forgiveness from the Clean Water State Revolving Fund for planning, design, and construction of wastewater system improvements project

  • City is trying to install two new lift stations and replacing piping from clay pipes to PVC pipes
  • No projected increase on rate payers
  • Item 9 passes

 

Item 10: Approve by resolution a request from the City of Pasadena (Harris County) for $10,999,860 in financial assistance consisting of $10,450,000 in financing and $549,860 in grant from the Flood Infrastructure Fund for planning, acquisition, design, and construction of a flood improvement project

  • During hurricane Harvey, the city’s west plant portion of their wastewater treatment plant was significantly damaged and left them without sanitary sewer services
  • Money will be used to move structures from the regulatory flood plain, construct a new detention pond, elevate electrical equipment, and install force manes to reroute portions of the inflow into another wastewater treatment plant
  • Proposed project would flood-proof the golden acres facility of the hurricane Harvey high water mark, reduce the footprint of the plant
  • The city qualifies for $2.85 in principal forgiveness as a disadvantaged community and $2.035 in zero percent financing as a small or rural disadvantaged community
  • Project Schedule – Closing: May 15, 2023. Feasibility Report: July 16, 2023. Design Phase: July 14, 2024. Start of Construction: August 23, 2024. Construction Completion: August 21, 2026.
  • Item 10 passes

 

Item 11: Consider amending by resolution, previously adopted Texas Water Development Board (TWDB) Resolution No. 21-017, as amended by TWDB Resolution No. 22-011, to modify the Guadalupe-Blanco River Authority’s Clean Water State Revolving Fund commitment to extend the commitment period

  • Guadalupe River Authority received $40 million for rehabilitation work on lake placid dam in central Texas
  • Due to delay in permitting the authority closed on a majority of the funds in February 2022 but requested $7.5 million be extended for one year until the permit was received and the project was bid and awarded
  • Permit was received in November of 2022, leaving insufficient time to bid, award and close prior to the February 2023 expiration
  • Authority requests 6 month extension to complete these pre-construction activities and close on the remaining funds
  • The City qualifies for $2,846,000 in principal forgiveness as a disadvantaged community and $2,035,000 in zero percent financing as a small or rural disadvantaged community
  • Project Schedule – Closing: May 15, 2023. Feasibility Report: September 29, 2023. Design Phase: June 28, 2024. Start of Construction: October 31, 2025. Construction Completion: October 30, 2026
  • Item 11 passes

 

Item 12: The Board will receive comments from the public

  • No public comment received