Nov. 1 – HARLINGEN – For the second time, the Harlingen Waterworks System is turning to the state to help finance the city’s largest project: a $258 million, five-year plan aimed at revamping the old sewer system.
Now officials are asking the Texas Water Development Board for an $11 million low-interest loan, likely requiring a 30% WaterWorks match.
So far, David Sanchez, interim general manager of WaterWorks, believes the agency has been given the “green light” to secure the loan.
At WaterWorks, officials expect the Water Development Board to grant an interest rate of 2.55%.
In the meantime, the Federal Reserve System is expected to cut interest rates slightly.
While the state would finance 70% of the loan, WaterWorks’ share would be approximately 30%.
With WaterWorks’ revenue expected to exceed $200 million, officials plan to ask the Water Development Board for further funding to help finance the $258 million project.
Last year, officials launched the project, aiming to improve the sewerage system to meet the city’s increasing demand.
Now some pipes are overflowing.
“We are in the planning phase,” Sánchez said in an interview. “We have to do engineering. We’re just getting started.’
On the drawing board, officials are working on the design of the main works of the sewer system, along with the project’s central pipeline, known as an interceptor line.
To help WaterWorks launch the project, the Water Development Board awarded the agency a $10 million low-interest loan in September 2023.
By July, officials had secured the loan through the sale of about $10 million in revenue bonds.
Through the Clean Water State Revolving Fund program, the Water Development Board provided WaterWorks with the 30-year loan at an interest rate of 2.55%, which was 1.21% lower than market rates and expected to save $2.4 million, says Anne Burger Entrikin, the city’s financial institution. consultant at First Southwest Co., said.
Over the life of the 30-year loan, which runs from 2026 to 2055, the city is expected to pay off $14.2 million in debt, she said.
In September 2023, the Water Development Board awarded WaterWorks the low-interest loan based on data showing Harlingen’s “financial condition was excellent,” board members told city officials.
As part of the city’s request, Mayor Norma Sepulveda told board members that the loan would “ease the burden” on utilities, reducing water rate increases needed to help finance the $258 million project.
Under the master plan, the city will finance $210.6 million, according to a WaterWorks document.
To help finance the project, city commissioners are increasing water rates by about 50% over the next five years.
In April, commissioners approved a WaterWorks-recommended water rate plan, which will increase the city’s minimum monthly charge for customers on 5/8-inch water meters from the current $7.93 to $9.91 this year and then to $23, 23 by 2028.
As customers use more water, rates will increase.
The series of water rate increases is expected to increase average monthly bills from the current $30.58 to $33.58 this year, and then to $63.53 in 2028.
Meanwhile, the city’s monthly minimum sewer rate for 5/8-inch meter customers will increase from the current $6.18 to $7.79 this year, and then to $19.63 in 2028.
WaterWorks officials have been planning the $258 million project for years, which aims to overhaul the aging sewer system to make room for future growth, while some pipes are overloaded, causing sewage leaks.
Over a five-year period, they plan a series of major projects, including the construction of the central interceptor pipeline and main lines, and the installation of gravity lines to replace old lift stations.
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