With Water Fund Approved, a Flood of Projects to Consider

Now that Proposition 6 has passed with close to 75 percent of the vote, the real work of water planning — and jockeying to get to the top of the projects list — begins.

“It will be a busy year,” said Carlos Rubinstein, the newly appointed chairman of the Texas Water Development Board. “There’s a lot of pieces that have to fall into place very, very quickly.” 

Setting some priorities in the State Water Plan is one of the first steps the board must take to reorder what has thus far been referred to as a “laundry list” or “wish list” of some 3,100 ideas. Legislators insisted that if $2 billion from the state’s Rainy Day Fund is used to help pay for such projects, they should be ranked.

But there’s a reason that the TWDB, which was created in 1957 on the heels of the state’s worst drought in history, hasn’t ranked projects in the past. 

“It’s no accident that projects have never been prioritized before, because when you prioritize projects, you’re making winners and losers,” said Bill Mullican, who was the agency's deputy administrator from 1997 to 2009. “And it will get political very quickly.”

Until now, the agency has served largely as a water infrastructure bank by doling out loans to public entities that ask for them. Now that $2 billion is available to make those loans cheaper, Mullican said, demand for assistance is likely to rise. 

And at the same time, “the people that are at the bottom of the list are going to care,” Mullican said. “They’re not going to like that.”

In addition, the actual ranking process is complicated. First, regional planning groups must come up with standard criteria for ranking projects in their individual plans — which are due in just a few weeks.

According to House Bill 4, they must consider when a particular project will be needed, its “feasibility,” “sustainability,” “viability” and “cost-effectiveness.”

Nothing in the legislation gives a particular weight to any of those factors, however, or explains how to define terms like “sustainability.” And feasibility is clearly not a part of many projects in regional plans today, given that many giant water projects are listed for which the water rights have not yet been secured.

Once the regional planning groups decide on their standards, the ranking begins. Eventually, those rankings go to TWDB, which must come up with its own set of standards for ranking and receive input from the public.

A regional group’s ranking will only be one component. The rest vary from the size of the population that a water project would serve to the project’s ability to “provide regionalization” (not defined) to “whether there is an emergency need for the project.” Environmental and economic impacts aren’t explicitly mentioned as required criteria.

“Any number of interest groups could find fault with these factors,” the University of Texas at Austin School of Law wrote in an analysis of the legislation. 

One entity poised to jockey for a high ranking is the Guadalupe-Blanco River Authority, which manages water resources for a 10-county area that includes Comal, Hays, Gonzalez and Victoria counties. The authority has worked for years on a project meant to serve the population clusters growing along the Interstate 35 corridor between Austin and San Antonio by diverting more water from the Guadalupe River into an off-channel reservoir, and tapping into new groundwater resources. 

Population projections show a huge demand for water in the corridor in 10 years, but the customer base isn't quite there yet, said the authority's general manager, Bill West. That's why the authority needs the state to back half the project's $400 million cost for the first decade. Proposition 6 would allow the Water Development Board to give the authority a deferred loan of $200 million, which it could start paying back within 10 to 12 years. 

“Without the state participation, the early years of the project would be so expensive that you couldn’t get city manager XYZ to sign up," he said. "But with the state helping carrying that cost the first 10 to 12 years of the project, then it becomes more affordable for the end customer.”

West said he is pleased with the criteria that legislators have said must be used to rank state projects, and he's confident that the Guadalupe-Blanco River Authority's project, known as the Mid-Basin Project, will be one of the first to get funded. He also hopes to push a $1.3 billion seawater desalination project high on the list, and he believes that's possible because a feasability study of the concept will be completed next spring. 

The final proposal for standards on the State Water Plan isn't due until March 2015, though Rubinstein said his personal goal is to finish it by next winter —  before the Legislature convenes for its 2015 session. A few months later, the money will begin to flow to whoever is deemed eligible. 

And as soon as that happens, West said, he'll be ready. "I will assure you that come January 2015, we will be standing in line with everybody else, saying, we’ve got a shovel-ready project.”