Water Planners Look to Define Eligibility for Conservation Funds

When voters approved using $2 billion from the state’s Rainy Day Fund for water financing last November, they were also supporting a measure that reserves 20 percent of that money for “water conservation and reuse projects.”

Now, state and local water planning officials have to decide what "water conservation and reuse" actually means. And after months of debate, the Texas Water Development Board, which will ultimately decide how to administer the funds, is still not sure exactly which water projects should fall into that category.

"When funding comes from the state, it is not unusual for there to be disagreements over the definition and what should be included and what shouldn't,” said state Sen. Troy Fraser, R-Horseshoe Bay, the chairman of the Senate Natural Resources Committee. “We want 20 percent allocated to conservation and reuse, but we also gave very broad authority to the board to make these decisions.”

So far, there seems to be a consensus over what does not qualify for the reserved conservation funding. In recent public meetings held by the water board, water officials and environmental advocates from across the state agreed that expensive projects like aquifer storage and recovery, a kind of underground reservoir storage solution, and desalination should be excluded. That does not mean they can’t be eligible for any low-cost loans provided by the $2 billion — but they will not get the special treatment afforded to conservation projects.

On the other hand, many planners agreed that rainwater harvesting projects and brush control practices, which could include removing water-intensive plants like cedar and mesquite, should qualify under the “conservation and reuse” category. There was also broad support for addressing water loss from treatment plants and pipelines. 

Beyond defining "conservation and reuse," there are a few other legal issues that could further complicate reserving 20 percent of the funds for that purpose. 

Jeff Leuschel, a Dallas lawyer who specializes in public finance law, said the phrasing of the landmark water legislation passed last session leaves some room for interpretation.  The statute saying the water board “shall undertake to apply” not less than 20 percent of funds for conservation and reuse leaves a lot of wiggle room for the water board. 

“The words in the statute are interesting to a lawyer,” Leuschel said at a recent University of Texas panel on water funding. “The ‘shall undertake to apply’ aspect essentially means to try. What will happen if you fail?” Some environmental groups that fought hard for that portion of the law also have that concern, and fear that there is no real requirement to reserve any funds for conservation in the law — only a suggestion. 

The Water Development Board’s chairman, Carlos Rubinstein, disagreed. He said he intends for at least 20 percent of the funds to go toward conservation and reuse, if not more.

“Conservation is a critical strategy for protecting the state’s water supplies," Rubinstein said. "I read the language … regarding the 20 percent set aside for conservation and reuse as a floor, not a ceiling.”

Reuse projects, which reclaim and treat wastewater to industrial or drinking standards, are also expensive, raising concerns that they would take up a large portion or even all of the funding reserved for conservation and reuse.

“The whole 20 percent could be used for reuse projects,” said Mary Kelly, an Austin-based environmental lawyer and consultant. “But I hope that is not the case, because there’s a lot that can be done with efficiency and reduction loss projects that don’t qualify as reuse.”

Kelly said the greatest risk with administering a $2 billion fund is that it is appealing for the board to invest in big projects because of mounting political pressure to do something big and flashy. That could tie up a large amount of money in long-term projects that won’t be executed until several years, or even decades, from now — failing to address current water needs and potentially even discouraging water conservation.

“The underlying goal should be to use the money to efficiently address real, not paper demands,” Kelly said.

In some cases, the funds could be used for unconventional purposes. For instance, cities have spent millions of dollars on public education campaigns to encourage residents to conserve water. Robert Mace, deputy executive administrator at the Texas Water Development Board, said such campaigns would also be eligible to qualify for funding as long as they are part of a strategy in the state water plan and there is a political subdivision, like a county or a city, that could apply for and ultimately spend the money.

Fraser said that state lawmakers meant for the money to be spent on water resource projects rather than measures like public education campaigns, but “if the board decides to include it, I'll be supportive of it.”

Carole Baker, executive director at the Texas Water Foundation, said that on top of those types of solutions, consumer-side efficiency technologies — like low-flow toilet or efficient showerhead distribution programs — should be considered “conservation,” and they should be able to receive funding.

“We should encourage people to think outside the box and see how technology could open their minds to new ways of water conservation,” Baker said. 

Mace said the board would strongly encourage the implementation of such technology. Many Texas cities, like as San Antonio, have long had success in reducing residential water use by giving people rebates for water-efficient appliances. 

The Texas Water Development Board will come up with draft rules for spending the Proposition 6 water funds by June 2014. After that, the public will have several months to weigh in.