State Water Implementation Fund for Texas (SWIFT)*

2016 SWIFT Commitments

SWIFT Program Information Sheet

Affordable, ongoing financial assistance for projects in the State Water Plan. Passed by the Legislature and approved by Texas voters through a constitutional amendment, the SWIFT program helps communities develop and optimize water supplies at cost-effective rates. The program provides low-interest loans, extended repayment terms, deferral of loan repayments, and incremental repurchase terms for projects with state ownership aspects.

1. Who can borrow?

Any political subdivision of the state with a project included in the adopted regional water plans and that will be included in the state water plan can apply for assistance through this program.

Political subdivisions include:

  • Non-profit water supply corporations
  • Municipalities
  • Counties
  • River authorities
  • Special law districts
  • Water improvement districts
  • Water control and improvement districts
  • Irrigation districts
  • Groundwater conservation districts

2. What types of projects are eligible for funding?

Eligible projects are those that are recommended water management strategies in the adopted regional water plans and that will be included in the state water plan, and have an associated capital cost. Alternative water management strategies are not eligible unless the regional and statewide plans are amended to include them as recommended strategies. Projects include conservation and reuse, desalinating groundwater and seawater, building new pipelines, developing reservoirs and wells fields, purchasing water rights, as well as numerous other strategies.

Recognizing the benefit of conservation and the needs of rural Texas, the legislation creating the program encourages SWIFT funding of projects for rural communities, agricultural water conservation, water conservation, and reuse projects.

3. What type of financing is available?

The SWIFT program offers a variety of loans and terms to accommodate the diversity of projects included in the state water plan. Grants are not available in the program. Entities may use any or all of these different structures available to finance their projects. SWIFT also has the ability to provide multi-year commitments for entities that have project funding needs spanning several years.

The types of SWIFT assistance are listed below.

  • Low-interest Loans - Long-term, fixed-rate loans offered at below-market rate. Maturities range from 20 to 30 years. Interest rates are based on the TWDB's cost of funds, which reflects the program's AAA credit rating. This interest rate is further reduced by a subsidy established by the Board for each funding cycle.

    The subsidy amounts for the current 2016 funding cycle are:
    • 20-year loan: 35%
    • 21 to 25 year loan: 25%
    • 26 to 30 year loan: 20%

  • Deferred Loans - Used to fund developmental costs (planning and design). Maturities range from 20 to 30 years. Principal and interest is deferred up to eight years from the delivery date, or until the end of construction, whichever is sooner.

    Interest rates are based on the TWDB's cost of funds, which reflects the program's AAA credit rating. No additional interest rate subsidy is applied for the current 2016 funding cycle.

  • Board Participation - Long-term, structured, fixed-rate financing through a temporary TWDB ownership interest in a regional facility. The TWDB's interest is in the excess capacity portion of the project and limited to 80% of total project costs. These terms are intended to allow entities to reasonably finance the total debt for an optimally sized regional facility. The local sponsor repurchases the TWDB's ownership interest under a repayment schedule that allows for the structured deferral of both principal and interest. Financing terms vary but are generally 34 years.

    Interest rates are based on the TWDB's cost of funds, which reflects the program's AAA credit rating. No additional interest rate subsidy is applied for the current 2016 funding cycle.

    Funding through the Board Participation option requires specific determinations be made by the Board, including that: the estimated cost of the facility exceeds current financing capabilities of the area; the project cannot be reasonably financed by the area; and the public interest will be served by the Board's participation in the project.

4. What project components are eligible for funding and how are project funds disbursed?

Funds can be used for planning, acquisition, design and construction costs. The pre-design funding option is available for most projects. This funding method allows an entity to receive a loan commitment on the basis of preliminary engineering, environmental, economic, and social information. Funds for completing detailed planning, including environmental studies, are provided at closing. Funds for design, preparation of final plans and specifications, and construction are placed in escrow until needed.

5. How much funding is available?

A strategic planning model was developed to analyze funding scenarios to achieve the legislative directive of financing $27 billion in state water plan projects over the next 50 years. This model will be used in analyzing the capacity of the program and the specific amount of funds available for each funding cycle. The Board has set a goal of providing approximately $8 billion over the first decade. The actual amounts and types of funds are expected to fluctuate between years to obtain these goals.

6. What is the application process?

The TWDB will solicit abridged applications, for financial assistance up to twice a year. The abridged applications will then be prioritized for funding consideration. See #13 below for more detail regarding the current cycle.

An abridged application contains sufficient information for the TWDB to prioritize projects using the system described in 31 TAC §363.1303 and criteria in §363.1304. The Board then considers the prioritization, establishes the funds available by category, the structure of financing, and the terms of any subsidy.

Invitations to submit full financial assistance applications are extended to those projects within the limits of available funding. Full applications are due within 30 days after the Board meeting at which the applicant's project received priority for funding. Full applications include information needed to complete the standard environmental, engineering, financial, and legal reviews by the TWDB staff. Once the technical review process has been completed, the project is presented to the Board for funding consideration.

7. What are the conditions of financial assistance?

The TWDB anticipates selling bonds for each round of funding through the SWIFT program. Therefore, borrowers are required to execute Financing Agreements, similar to those used in other TWDB financial assistance programs. Due to the complexities and timing involved in the issuance of the TWDB bonds, borrowers will need to close their individual loans shortly after the TWDB's bond closing. It is anticipated that the loan closings will occur in November or early December, 2016, for the current funding cycle.

8. What if an entity requires funding over a period of time for a project?

For entities that have funding needs for a project that may span several years, SWIFT has the ability to provide multi-year commitments. This option allows borrowers to receive a funding commitment for the full amount of their project, but close on portions of it over a multi-year schedule. The applicable subsidy at the time of commitment is locked in for a period of five funding year cycles. Each funding cycle, entities will be asked to verify that year’s requested amount.

9. Where is my project listed in the state water plan?

The second SWIFT funding cycle will be based on projects in the 2016 Regional Water Plans to be included in the 2017 State Water Plan. A listing of the recommended water management strategy projects is posted on the 2016 Regional Water Plans webpage.

10. What if an entity's project is not included in the 2016 Regional Water Plans or the 2017 State Water Plan? Do they have to wait until the next planning cycle?

An entity has the option to request an amendment to the regional water plan to include its project, which is the first step for a potential amendment to the state water plan. Please contact your Regional Team for more information.

11. What are the prioritization criteria?

The prioritization system is described in full detail in 31 TAC §363.1303 and criteria in §363.1304. A summary of the criteria is listed below:

  • The population served by the project when fully operational
  • Whether the project serves a diverse urban and rural population
  • Whether the project provides regionalization
  • The percentage of water supply needs met by the project within the first decade
  • Local contributions to the project
  • Financial capacity of the applicant to repay
  • Whether the project addresses an emergency need
  • Whether the project is ready to proceed with implementation or construction
  • Demonstration or projected effect of the project on water conservation, including preventing water loss
  • The priority ranking assigned to the project by the applicable Regional Water Planning Group

12. Are funds reserved for projects that are "shovel-ready?"

No. Applicants can receive funding for planning, acquisition, and design activities through this program. However, projects that are ready to proceed receive additional points in the prioritization process.

13. What is the expected timeline for the application and approval process for the next round of funding?

2016 SWIFT Application Timeline

  • December 1, 2015 - Abridged application period begins
  • February 5, 2016 - Abridged applications due
  • April 11, 2016
    • Board considers prioritization of abridged applications
    • Board identifies amount of funds available by category; establishes the structure of financing, and the subsidy terms
    • Invitations extended to submit full financial applications
  • Spring/Summer 2016
    • Entities submit complete applications due by May 11, 2016
    • Board considers and approves applications
    • Board authorizes TWDB bond sale
  • Fall 2016
    • TWDB bond sale
  • Winter 2016
    • TWDB bond closing
    • Borrowers loans closings

SWIFT Loan Process

14. Are there special requirements for accessing SWIFT funding?

  • Projects must be recommended water management strategies in the most recently adopted regional water plans and subsequent state water plan and have an associated capital cost. A regional water plan may be amended to add strategies or capital costs that are reviewed and approved by the Regional Water Planning Group (RWPG). The state water plan may be amended to reflect additions made to the regional plans. Our Amendment Process Flowchart outlines the amendment process for both the regional and state water plans.
  • An Infrastructure Financing Report Survey must be completed
  • A water conservation and drought contingency plan is required for financial assistance greater than $500,000 as mandated by the Texas Administrative Code Title 31 §363, Subchapter A.
  • Executed Financing Agreement
  • Private Placement Memorandum
  • Master Agreement for Board Participation funding
  • Historically Underutilized Business reporting
  • Reservoir funding must be segmented or phased; permitting is required prior to a construction commitment
  • Board Participation is limited to funding of excess capacity portion and up to 80% of total project costs
  • Board Participation requires specific determinations (31 TAC §363.1308(c)) and an executed master agreement
  • State level environmental review
  • Review of legislative requirements regarding water loss threshold limits

15. Who can I talk to at the TWDB about my project, how to apply for funding, or other questions I may have regarding my water needs?

In order to provide you with a single point of contact at the TWDB, our project implementation staff is organized into six regional project implementation teams. Each team is led by a manager that serves as the primary point of contact for both our existing and future customers.

Look up contact information for your Regional Team here.

* The SWIFT program includes two funds, the State Water Implementation Fund for Texas (SWIFT) and the State Water Implementation Revenue Fund for Texas (SWIRFT). Revenue bonds for the program are issued through the SWIRFT.

Turns Planning into Projects