Texas Water Development Board – July 25, 2023

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The Texas Water Development Board met on July 25 to take up a number of items. The board approved $1.6b in financial assistance for water, wastewater, and flood projects through the SWIFT, FIF, and state revolving funds. $729,990,000 went to the North Harris County Regional Water Authority, $532m to the North Texas Municipal Water District, and $117m to the Upper trinity Regional Water District. A complete list of funding approved can be found here. An archive of the hearing can be found here.

This report is intended to give you an overview and highlight 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.

Members discuss outreach

Item 2: Consider authorizing (1) the publication of a notice of adoption of rule review for 31 TAC Chapter 354; (2) the publication of proposed adopted amendments to 31 TAC § 354.6; and (3) the publication of proposed adopted repeals to 31 TAC §§ 354.1, 354.2, 354.4, 354.6, 354.7, 354.8, 354.9, 354.11, 354.13, 354.14, 354.15, 354.16, and 354.17.

Kendall Cowal, Executive Administrator Staff

There will be a new section for expedited permit review; various expired rules have been reviewed
TWDB is no longer required to publish all MOUs
No public comments were received on these changes
Peyton- I believe this clears up the things we want to
Stepney- We still have to adopt new MOUs
- Yes, all new MOUs will come to the Board
Motion to approve changes passes

Item 3: Consider authorizing the Executive Administrator to execute a contract amendment with Computershare Trust Company, NA to extend the contract for an additional one-year period, and to increase the value of the contract by $350,000 for the purpose of registering and safekeeping political subdivision obligations for all financing programs except the State Water Implementation Revenue Fund for Texas.

Leroy Lopez, Executive Administrator Staff

Requesting approval to amend contract with Computershare to increase the contract by a year and increase value by $350k
Peyton- Is a vital piece of keeping tabs on political subdivisions; how was this implemented in the past?
- Went out for bids in 2018; Wells Fargo won the contract; there are charges for number of loans, so we estimate the amount required for the programs
Peyton- When do we anticipate going out for bids again?
- Sooner the better
Peyton- There aren’t a ton of companies that provide this tracking?
- Correct
Stepney- Is important that we are evaluating performance
Paup- This is a vital tool for the agency
Motion to extend the contact passes

Item 4: Consider approving by resolution the establishment of new tax-exempt and taxable lending rate scales for the Texas Water Development Fund II Water Financial Assistance Account to be effective July 25, 2023.

Alejandro Matsu, Executive Administrator Staff

The purpose of the scales is to correct cost of issuance and payment mismatching
The new lending rate scales are recommended by the Executive Administrator
Peyton- Thank you for your work
Paup- We are at historically low rates that help our borrowers
Motion to approve resolution passes

Item 5: Consider approving by resolution the establishment of new tax-exempt and taxable lending rate scales for the Economically Distressed Areas Program to be effective July 25, 2023.

Alejandro Matsu, Executive Administrator Staff

TWDB is required to update lending rates after new bond sales
Bond proceeds will be made available to EDAP
8 basis points are added to tax exempt and 9 points to taxable rates
Paup- EDAP does a really good job with the dollars it has
Motion to approve new scales passes

Item 6: Consider approving by resolution: (a) the issuance, sale and delivery of Texas Water Development Board bonds to support the State Water Implementation Revenue Fund for Texas program in one or more series; (b) the execution of the Bond Indentures; (c) the execution of the State Water Implementation Fund for Texas Funds Transfer Agreement;(d)the Preliminary Official Statement; and (e) authorization for the Executive Administrator, Chief Financial Officer, Development Fund Manager, or any other authorized representative to act on behalf of the Texas Water Development Board in the sale and delivery of such bonds.

David Duran, Executive Administrator Staff

Recommending the issuance of bonds for SWIFT program
Expected not to exceed $1.1b; $130m drawn from SWIFT to fund
Underwritten by Wells Fargo
Stepney- What is the timing?
- Expecting approval beginning of August; one week later will submit notice of intent to submit bond
Paup- SWIFT is the gold standard in infrastructure lending programs. Other stakeholders are shocked that we have managed to leverage almost 11 billion dollars in water supply projects
Motion to approve the issuance of bonds passes

Item 7: This is an informational item summarizing the development, adoption, and review processes for the 2023 Regional Flood Plans. No action is requested.

Ring June, Executive Administrator Staff

The regional flood planning groups are required to submit regional flood plans
All 15 groups adopted final regional flood plans and submitted them
This is the first program of its kind, aimed at reducing the risk of flooding
Each group governed itself and approved its own bylaws, each selected a regional government to implement their plans
Approximately 1/5 of the state falls in the 1% chance of flood plane
8% of state’s population is in 1% chance of flood planning
6,000 police stations, fire stations, hospital schools located in 1% chance regions
200 flood mitigation projects are recommended
845 flood management strategies are recommended
All plans were submitted by the deadline
Acknowledged regional chairs present
We collaborated with many agencies on this project
This Board’s unwavering support made this program possible
Paup- the board thanks you, you have done a tremendous job
Peyton- The impact that this will have across the state is great. Rivers don’t respect county lines
Stepney- When you have big accomplishments it takes big effort. We have been getting questions about our process, internationally
Paup- this program will save lives and people’s homes

Katherine Thigpen, Senate Committee on Water, Agriculture, and Rural Affairs

Read Statement from Chairman Perry; thanks all involved
Congratulations to the TWDB for staying the course
Commended all the groups involved in this program; state has risen above after Hurricane Harvey
Paup- We would like to thank Senator Perry for always believing in us

Item 8: Consider approving the 2023 Regional Flood Plans for Regions 1 through 15.

James Branakowski, Executive Administrator Staff

All groups worked through cycle to develop plans
All plans have reported a variety of metrics and recommendations for how to reduce flood risk
A summary of flood risk and recommended solutions are included in the package
Region 1 encloses an expansive system of playas. Prior to this program, most of this region was outdated or unmapped
Region 2 Poulty and timber are at major risk of flooding. Had significant data needs
Region 3 Covers Trinity River. Highest population of any region. Held public meetings at multiple locations throughout region
Region 4 Sabine River. Highest average annual volume of flow
Region 5 Neches. Half of land area is used for forestry. Includes high concentration of oil and gas infrastructure
Region 6 San Jacinto. Highly urbanized region with most people identified at risk
Region 7 Upper Brazos. Utilized a split basin approach due to the region’s unique topography. Most roadway miles at risk
Region 8 Lower Brazos. Diverse region. Divided into four subregional zones to plan for the unique characteristics of region
Region 9 Upper Colorado, 95% of land used for ranching and farming. Not known for frequent flooding but has violent thunderstorms
Region 10 lower Colorado. Largest amount of agricultural land identified flood risk
Region 11 Guadalupe region. Lies in flash flood alley
Region 12 San Antonio. Smallest flood planning region by area. Largest sum of FMPs
Region 13 Nueces. Created online regional flood plan story map
Region 14 Upper Rio Grande. Largest flood planning region by area. Ag land makes up 40% of developed area
Region 15 Lower Rio Grande. Region 15 identified the highest percentage of land area in the hazard areas
Executive Administrator recommends approval

Barbara Canales, Region 13

Had it not been for TWDB’s incredible belief in our drainage study. 15 of our projects came from that study
I understand the impact to life and property
All politics are truly local
Its about the agricultural community who have their crops destroyed
We can now provide relief
We now know what projects would be a good investment for Texas
I would urge you that we must do more, we are just getting started
We need to really look at the way to fund these projects
We need to prioritize the rural communities because the impacts are too serious when the floods come

Travis Pruski, Region 13

Thanked TWDB staff for their work

Omar Martinez, Region 14

Thank you for everything you have done for our community
Thanked TWDB staff
Thanked Rio Grande Council of Governments
We received tens of millions from the flood fund
We don’t usually qualify for FEMA funding because of our region, but we do have negative flooding impact
I encourage the Board to further facilitate and incentivize new programs
We are targeting aquifer refill projects. We are essentially trying to speed up natural processes
We have come a long way

Jamie Salazar, Region 15

Thank you for all of your support
Our major problems are not hurricanes but are rain events

David Fuentes, Region 15

This is a serious program that we are taking seriously
We do have a reclamation project, we are testing a process to reclaim drainage water
TWDB has invested in this project
It is both a mitigation and resource project
Peyton- I fell like all the good things have been said. We didn’t do any of the hard work. All these volunteers put in so much effort
Stepney- I think it is so important that the stakeholders came today. We have all different reasons that it is important that we manage this at a local level. I am glad we have local stakeholder involvement
Stepney- Adaptive management is very important, we can’t rest we need to always move forward
Paup- This last legislative session, we received $635 million additional dollars for our flood efforts. We appreciate that the legislature sees the importance of what we are doing
Paup- We were able to commit over $500 million dollars in 2 and a half years and that is very impressive
Motion to approve flood plans passes

Item 9: Consider authorizing the Executive Administrator to execute an interagency contract with the University of Texas at Arlington in an amount not to exceed $2,000,000 to provide engineering services.

Clay Schultz, Executive Administrator Staff

New contract recommended
Proposed budget of 1 million dollars
Peyton- I am a supporter of using this relationship
Stepney- I think this is a really important tool. We have been very pleased with their work. How do we do our due diligence?
- The work goes through the same review process that our staff’s work goes through. We also hold training for the contractors as well
Stepney- If you find tweaks that need to be made, do you have a way of doing that?
- Yes, I meet with them every few weeks
Paup- I can’t think of a more important partnership
Motion to execute a contract passes

Item 10: Consider amending by resolution the previously adopted Texas Water Development Board Resolution No. 21-082 to modify the Brushy Creek Regional Utility Authority’s State Water Implementation Revenue Fund for Texas annual closing schedule and extend the commitment to December 31, 2024.

Tom Barnett, Executive Administrator Staff

In 2021, the TWDB approved funding to the Authority
Low interest financing for Cedar Park and multi-year commitment for Leander
Authority is requesting to better align funding with the construction schedule
Peyton- We prefer projects to be on schedule but happy to accommodate
Motion to approve resolution passes

Item 11: Consider approving by resolution a request from the Brushy Creek Regional Utility Authority (Travis and Williamson counties) for $98,055,000 in multi-year financing from the State Water Implementation Revenue Fund for Texas for construction of a water supply project.

Tom Barnett, Executive Administrator Staff

This financial assistance is for phase 1d and phase 2 of this project
Request is for low interest financing for cedar park and multi-year financing for round rock
Will increase capacity of water supplies for these cities
Phase 2 construction is expected to be completed by 2027
Phase 1d is an expansion in the water treatment plant
Peyton- To clarify, this d intake pump was originally part of the plan?
- Yes, this was always part of the plan
Peyton- So this phase of the project is to ensure that we are continuing to meet the water needs of the area?
- Yes, that is correct
Peyton- This is a great package for these cities
Stepney- It seems like the cities are doing a good job of ensuring that they can get to the water. Will there be separate funding mechanisms for each cities?
- It is one package for brushy creek. Within that, it is itemized. Each of the cities is responsible for specified terms
Paup- This is a great example of cities trying to get ahead of the growth. The cost overruns are an unfortunate affect of inflation
Motion to approve funding passes

Item 12: Consider approving by resolution a request from the Palo Pinto County Municipal Water District No. 1 (Palo Pinto and Parker counties) for $12,000,000 in financing from the State Water Implementation Revenue Fund for Texas for planning, acquisition, and design of a water supply project.

Tom Barnett, Executive Administrator Staff

District supplies water to Mineral Wells and Lake Palo Pinto area
Supplies water to 34,000 residents
Palo Pinto has lost some of its water capacity
Plan consists of construction of new dam and spillway
The combined storage capacity of reservoirs will be increased
Project has received $25 million from the TWDB
District will proceed to construction in 2 years
Approval Recommended
Peyton- What is the difference between the $25 million and this $12 million
- Additional design and acquisition work was necessary and environmental concerns
- There are road and utility reallocations
Paup- sometimes when they get into the pad, they realize that there is more to be done
Peyton- what is the construction estimate?
- Current estimate is 180 million dollars
Stepney- We are also seeing environmental benefits here. It is a good project
Peyton- I think we need to emphasize that the costs were substantially less years and years ago. We need to do projects now
Motion to approve funding passes

Item 13: Consider approving by resolution a request from the Oak Grove Water Supply Corporation (Bowie County) for $300,000 in principal forgiveness from the Drinking Water State Revolving Fund for participation in a new regional water system.