Monthly Featured Story - October, 2011 | Texas Water Development Board

Proposition 2 October 2011

The record-breaking drought gripping Texas has vividly demonstrated the need for expanded water supplies and improved infrastructure in Texas. This year, the news has been full of stories about towns struggling to supply enough water for their growing populations and water main breaks occurring in unprecedented numbers in many areas. In the 1950s as a result of the crippling "drought of record," the Texas Water Development Board (TWDB) was created to address those very needs.

In creating the agency, the State of Texas provided for a mechanism to offer various cost-effective funding programs to entities of all sizes across the state to build and repair water related infrastructure.

On November 8, 2011, Texans will have the opportunity to vote on Proposition 2, which is a proposed constitutional amendment approved by the 82nd Texas Legislature to be included on the ballot. The proposition is a constitutional amendment that will allow for the issuance of additional general obligation bonds by the TWDB in an amount not to exceed $6 billion outstanding at any time for water supply, water quality, wastewater and flood control projects. These bonds are the TWDB's primary vehicle for funding water-related infrastructure in Texas.

The population of Texas is expected to increase by almost 82 percent over the next 50 years, making it inevitable that cities and towns will need to expand and repair their infrastructure to keep up. The state's credit rating makes it possible for the agency to sell bonds on an entity's behalf and loan them the proceeds at lower interest rates than they can obtain elsewhere, saving money for all involved. For some entities, the TWDB is one of their only financing options.

For example, the TWDB has provided more than $53 million in loans to the Canyon Regional Water Authority (CRWA) to construct a multiphase project to reduce citizens' reliance on the Edwards Aquifer by furnishing a reliable supply of surface water. In CRWA's case, the TWDB helped them get a foot in the door to expand their options for future financing. "We had no credit rating at first," David Davenport, general manager of the CRWA, said. "Now we're able to sell bonds ourselves because of the TWDB's help in the beginning."

The programs affected by Proposition 2 have helped hundreds of Texas communities repair and build infrastructure to address immediate issues and prepare for future needs. The City of Merkel borrowed $3 million from the TWDB to repair its aging wastewater and water infrastructure. With the funds from the TWDB, Merkel replaced deteriorating sewer lines and manholes, resulting in reduced operational costs for the City. Merkel also replaced thousands of feet of water distribution lines, eliminating costly repairs and water loss, and replaced its treated water supply line from the city of Abilene, which improved water flow and pressure.

"In the long-term, there will be a good, steady supply of fresh water for citizens," Merkel City Manager Steve Campbell said.

Recently, the TWDB provided $4,125,000 in loans to the Greater Texoma Utility Authority to address the immediate and long-term water needs of the City of Anna. The City's population grew rapidly from 1,225 in 2000 to 8,249 in 2010, and the City had to ensure its resources could keep up. Loans from the TWDB made it possible for the City to construct a waterline to connect new wells to its existing water system to address immediate needs. The City was also able to build new infrastructure to connect to a regional surface water pipeline to ensure its long-term water supply needs were met.

Throughout all economic conditions over the years, "the TWDB has been a secure source of funding for projects in our area and across the state," GTUA general manager Jerry Chapman said. "The financial resources available through the TWDB are essential to the economic development of the state."