During budget workshops in August and September, city officials discussed ways to fund several rehabilitation and expansion projects in order to improve its aging water and sewer systems.
The fiscal year 2015-16 budget includes revenue bond sales totaling about $36 million for water and drainage system projects. The bonds are expected to be issued sometime during the first quarter of 2016, according to Plano Budget Department officials. “This will be the first time the city of Plano has issued bonds for its water and sewer projects since 1993,” said Matt Yager, budget and research specialist for the city of Plano. “At the same time we’re not going to have that much revenue coming in to support the cash funding [of these projects].”
The city is keeping close watch on its water and sewer fund, which is used to cover operational costs until water payments are received. As operational costs increase for expanding infrastructure, this fund is expected to dwindle over the next few years as water bill revenue decreases, according to city officials.
Plano Engineering Director Jack Carr said the bond sale would help the city enhance its water and sewer system as it continues to grow in population.“We need these revenue bond sales to help us get through these projects,” he said. “We need these increased capacity improvements to keep up with the growing demand [for services], and the maintenance to replace some of our aging infrastructure.”
Regional supply
Increased water and sewer rates within NTMWD’s contract system are used to fund major projects like the Lower Bois d’Arc Creek Reservoir in Fannin County. This $992 million project, which will provide water to Fannin County and supplement the rest of the district’s service area, is the first major reservoir to be constructed in Texas in the past 30 years and is expected to be operational in 2020, according to the district.
Money from the increased rates is also being used to pay off some of the district’s completed infrastructure, said Janet Rummel, NTMWD public relations manager. “We’re still paying off those projects that we put in place,” she said. “That’s what the cities are paying for.”
The NTMWD is a nonprofit entity created by the Texas Legislature in 1951 after the area experienced its first drought of record, NTMWD Executive Director Tom Kula said. Its 10 original member cities—which equated to about 30,000 residents at the time—were relying on groundwater and starting to permit for the construction of Lavon Lake. Today, the district serves 1.6 million residents across Collin, Dallas, Denton, Fannin, Hopkins, Hunt, Kaufman, Rains and Rockwall counties. Smart planning has helped the region accommodate growth over the years and will continue to support the area, Rummel said.
“We had to plan ahead to be in a position to say, ‘Yes, we have the infrastructure to serve their needs,’” she said. “When [member cities say] they’re paying for water they aren’t using, they’re paying for a pipeline that needed to meet those peak demands that they expect us to continue to meet.”
The district is caught in a balancing act as it finds a way to keep costs low while supporting the needs of a rapidly growing region, Kula said. Conservation, he said, will continue to be an important part of the equation.“We’ve built the infrastructure based on the needs [our member cities] have had in the past, and they’re going to meet those demands again,” he said. “Revenues have been down and the growth continues. Rates are going up right now to not only support our operating and maintenance costs of today but to also [pay for] the infrastructure costs of tomorrow.”
Balancing act
Deputy Mayor Pro Tem Ben Harris said Plano has prided itself in not having to finance its water and sewer projects for more than two decades. However, it must now issue bonds to keep from imposing higher water and sewer rates for residents. Harris said he hopes discussions to revise the member city contracts take place soon, as they should reflect more modern conservation standards.“The contract as exists today is unsustainable. It was created at a time before conservation even existed,” he said. “At what point does the system break?” The Plano City Council appointed former mayor Phil Dyer to the NTMWD’s board of directors in May to discuss whether the contracts should be revised. Plano has paid a set rate for 26.7 billion gallons of water annually since 2001 when severe drought led to a usage peak and has not reached that mark since, according to NTMWD annual reports. During the 2014-15 water year, which ended July 31, Plano used 17.9 billion gallons of water, according to city documents.
Dyer said some city residents and officials argue the fairness of paying for water not used, and hopes the board can find a solution. “[The board of directors] is not trying to whitewash the challenges that face the district,” he said. “As a group, [it] recognizes the critical importance of what’s going on. They’re having to make some very difficult decisions.”
The real challenge, he said, will be balancing the interests of all 13 cities.
“It’s a real arguable situation,” Dyer said. “These contracts are long-term; you need that long-term stability so cities can plan for themselves. But on other hand, when you get into longterm deals and have no flexibility, times change and situations change, and a little more flexibility would be helpful."
