A 20-year low interest loan totaling just over $14.5 million is how Buda plans to pay for its share of a planned pipeline that would help fulfill the city’s water needs.
The Buda City Council unanimously approved seeking funding assistance from the State Water Implementation Fund for Texas (SWIFT) program to continue with phase 1B of the Alliance Regional Water Authority’s (ARWA) pipeline. ARWA, previously known as the Hays Caldwell Public Utility Agency (HCPUA), projects the pipeline project to be completed by 2023.
Graham Moore, executive director of ARWA, said Phase 1B project will include construction of wells, raw water pipelines, treated transmission pipelines and pump stations.
“Phase 1B will allow us to produce, treat and delivery our permitted Carrizo water to each of our sponsors, tying into the Phase 1A infrastructure that is currently in planning.”
Buda city leaders moved forward with financing after Jennifer Douglas, Buda financial advisor, presented a trio of financing options for the future project, which is projected to cost $213.4 million, divided among all involved entities, including Buda, Kyle, San Marcos and Canyon Creek RWA.
The first option, which was selected, featured a 20-year low interest loan for a total principal and interest of roughly $14.5 million, according to city documents.
A second option centered on a 30-year low interest loan that would require a principal total of $18.4 million, while option three featured a 20-year loan totaling $18.1 million.
Moore said San Marcos went with the 20-year loan to pay $20 million less than Kyle, which opted for the 30-year option which would impose less of a financial burden on current residents.
“State funding is a very good deal,” Moore said. He added that funds through the SWIFT program are more flexible with repayment options than other borrowing entities. Under questioning from the council, Douglas said she was comfortable with all options proposed by staff. City council members said they felt comfortable with the $14.5 million option.
Moore said Phase 1A of the pipeline construction, which was already approved by all involved entities, should begin in Fall 2017 and take approximately six to seven months to complete.