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Property taxes? Water project payment needed

Despite receiving approval from the Texas Water Development Board (TWDB) on the change of scope for its wastewater project last week, more challenges might be on the horizon for Wimberley city officials. 

That could include instituting a property tax, proposed by the TWDB as a condition of approval, in order to help pay down a $5.5 million loan from the agency that could cover the cost of the project changes.

In addition to the proposed ad valorem tax to pay for the $5.5 million loan, the city must submit an “issuance of an updated favorable environmental determination.” 

This would include additional environmental assessments on the proposed boring under Cypress Creek to transport raw effluent and protections for endangered species in the area. 

“Because of previous delays, and the potential of additional delays that could affect the city’s ability to generate sufficient revenues to repay the debt, I’m recommending additional security for the debt,” TWDB Executive Administrator Jeff Walker said. 

TWDB officials add additional scrutiny
The city lost nearly $2 million in grant funding when officials decided to change the scope of its wastewater project. This change, in conjunction with the termination fees of the Black Castle contract for the city-owned plant, has continued to put a financial strain on the city. 

According to the agenda packet, the city’s existing utility system and parks department generated a net loss of $43,635 in 2018. The overage was primarily due to increased expenses from the city’s proposed wastewater project.

However, the city does have sufficient funds to complete the proposed change of scope, according to the TWDB recommendation.

TWDB officials, however, cited concerns about a lack of a reusable water irrigation system to Blue Hole Regional Park, which was part of the city-owned plant project.  

Agency officials said the proposed environmental assessment will be heavily scrutinized. This includes complying with the findings of other state agencies on the potential risks of the boring under Cypress Creek.

In February, a 14-page letter from Texas Parks & Wildlife Department (TPWD) indicated the agency wanted additional security measures for the boring. This includes a recommendation that the entrance and exit points are 500 feet from the streambed. 

Andrew Weber, president of the Friends of Blue Hole, said he is hanging his hopes on a strict environmental assessment. Weber disputed the city’s claims that the 500-foot setbacks cannot be accomplished because of “existing improvements.” 

Worries are growing, however, on how the city plans to fund its project. Incorporating an ad valorem tax rate could be a hard sell for city officials, as Wimberley has never had a city property tax. Wimberley area residents currently pay property taxes to Wimberley ISD, Hays County and Wimberley Fire.

Wimberley officials could issue general obligation bonds, which require a referendum. Wimberley could issue debt without an election, unless a petition is filed by at least five percent of voters who call for a referendum.

Issuing debt, however, would require a property tax rate to pay them off. Wimberley resident Lewis Parks questioned how Mayor Susan Jaggers plans to get voter approval for any proposed bonds.

“How can she (Jaggers) make this happen after she ran heavily on a no property tax platform?” Lewis asked.

Next Steps
Walker said the city council would have to vote on the bonds, which would then need approval from the Attorney General’s office. 

If approved, it will return to Walker and TWDB staff in conjunction with the environmental review before construction can begin. Another component of the environmental assessment will require a biologist to review the site for any potential dangers to the endangered Golden-Cheek Warbler.

Peter Lake, TWDB chairman, said their staff has bent over backward working on the city’s change of scope. 

“This problem needs to be solved but the patience of this board is not infinite,” Lake said. “So I encourage current leadership, past leadership and the entire community of Wimberley to make sure this problem gets solved.” 

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