Eagle Pass City Council approves Resolution seeking $50 Million Loan to expand & improve City Water Works infrastructure

By: Jose G. Landa, Eagle Pass Business Journal, Inc., Copyright 2016

The City of Eagle Pass, Texas City Council held their monthly meeting on Tuesday, June 7, 2016 and unanimously approved a resolution authorizing the City to apply for a $50 Million loan with the Texas Water Development Board (TWDB) to finance certain improvements and expansion projects at the Eagle Pass Water Works and Sewer System (EPWWS) after a presentation and discussion at the meeting.

Under resolution No. 2016-R, the City of Eagle Pass seeks financial assistance from TWDB for the Eagle Pass Texas Water Works and Sewer System for funds not to exceed $50 Million which would be needed to acquire, purchase, construct, improve, extend, enlarge, and repair the City of Eagle Pass Water Works and Sewer System (the “System”) and to pay certain costs of issuance of such projects and repairs.

Eagle Pass Mayor Ramsey English Cantu opened up the agenda item and City Council heard a presentation from EPWWS general manager Jorge Barrera and civil engineer Jaime Kypuros from the engineering firm of Tetra Tech of San Antonio, Texas concerning exactly what projects the $50 Million Loan funds would be used for to improve and expand the City’s Water Works System.

Barrera and Kypuros highlighted some of the prioritized projects for these $50 Million, including the Cast Iron Pipe Replacement Program for the City of Eagle Pass downtown area at an estimated cost of $16 Million, Water Storage Tank Rehabilitation, Water Plant Expansion & Rehabilitation Project at an estimated $7 Million, Water Rights Acquisition at an estimated cost of $6.78 Million, Las Quintas and Jardines Verdes water line Replacement Program at an estimated cost of $3 Million, Sludge Dewatering Belt Press & Building at an estimated cost of a $2 Million, a new 2 Million gallon New Ground Water Storage Tank at an estimated cost $2,000,000, and almost $10 Million for the cost for engineering, legal, financial advisor fees and issuance costs.

Barrera advised City Council that grants are not currently available to the City, but that low interest loans through the TWDB instead of the open market sources would save the City millions of dollars in costs, as well as taxpayers and rate payers.

City Council and the EPWWS administration further discussed the projects to be covered with the $50 Million Loan should the City be awarded the loan by TWDB.

Mayor Cantu stated that the projects being looked at had been on the table but that for certain reasons had not been presented, including the lack of funding availability through low interest loans or any other financial sources. Now, TWDB is offering these low-interest loans to assist Texas cities, counties, and other governmental entities to improve and/or expand their water resources as well as the conservation of precious water resources.

The City Council unanimously approved the resolution authorizing the City of Eagle Pass to apply for a low-interest loan with the TWDB not to exceed $50 Million.

“The Council has determined that the aforementioned capital improvement projects cannot be reasonably financed without financial assistance from the Texas Water Development Board (the “TWDB”) for the completion of the aforementioned projects through the TWDB’s Drinking Water State Revolving Fund (the “DWSRF”).” states the resolution.

“Whereas ,the City deems it necessary to apply to the TWDB for financial assistance; and WHEREAS, in accordance with the rules and regulations of the TWDB, the Council is required

to pass a resolution to accompany such applications;now therefore be it resolved by the Council of the City of Eagle Pass, Texas that Section 1.The Council requests that the TWDB grant financial assistance to the City in an amount not to exceed $50,000,000.00 to acquire, purchase, construct, improve, extend, enlarge, and repair the System and to pay certain costs of issuance. An application is hereby approved and authorized to be filed with the TWDB for its DWSRF state assistance program for this purpose.” states the resolution.

Mayor Cantu further read the details of the resolution which include compliance of various provisions required under a TWDB application for the DWSRF State assistance program, including authorization of the Mayor to execute any contracts or procedures under the application and also the authorization of certain firms and individuals to assist the city in the preparation and submission of such application.

The professional firms assisting the City of Eagle Pass and the City Water Works System with this $50 Million loan application and development of this improvement project include the City’s Financial Advisor of Estrada Hinojosa & Company, Inc. represented by David N. Gonzalez, the City Water Works System Engineering firm of Tetra Tech represented by Jaime Kypuros and S. Keller Drozdick , the Bond Counsel firm of Escamilla & Poneck, LLP, represented by Juan F. Aguilera, John D. Rice, and Humberto F. Aguilera.

Barrera noted that if approved and once the projects are developed, City Water Works System rate payers will face a rate increase to pay for the $50 Million loan. Barrera stated that the Eagle Pass Water Works System offers the lowest water rates in the region as well as the best water technology. Mayor Cantu added that Eagle Pass enjoys the best water system in the region at the lowest cost to rate payers. Barrera and Kypuros noted that these improvements to the City’s Water Works System infrastructure are needed to keep pace with Eagle Pass and Maverick County’s growth for the next 50 years.