Less than 1% of State Bonds for Water Projects is Going to Rual Texas
By Erin Douglas, The Texas Tribune
Rural areas of Texas receive only a fraction of a percent of bonds for state water plan projects, far less than what lawmakers intended nearly a decade ago when the program was conceived, a state report shows.
The Texas Water Development Board is entrusted with billions of state dollars to issue bonds, provide loans and disburse grants for water supply, wastewater treatment, flood control and conservation projects. One of its programs, the State Water Implementation Fund for Texas, or SWIFT, issues bonds to provide low-cost loans to finance water supply projects.
But while that program has committed $9 billion to help finance projects in the state water plan since 2015, the agency has failed to meet its legislative target to provide 10% of those funds to rural communities and agricultural water conservation, according to a report by the staff of the Texas Sunset Advisory Commission, which evaluates the performance of state agencies.
Instead, only 0.17% went to rural communities between 2016 and 2020.
The report said the agency needs to bolster outreach efforts in rural and economically disadvantaged areas of the state and better track all of its programs to understand the barriers small communities face to apply.
Rural areas with small populations struggle to apply for loans, Texas water finance experts and water managers in rural communities said, because they lack the technical expertise to submit an application. Some don’t even know the programs exist. Plus, such communities often don’t have the population base, political support or local matching funds required to take on large amounts of debt, even with low interest rates or favorable terms.
Becky Brewster ran for mayor of Van Horn, population 1,941, in part on a promise to fix infrastructure — water lines broke frequently and the city had to issue a boil water notice to residents each time.
“I was getting frustrated with us not getting anywhere,” she said. “It was just seeming to get worse.”
But to replace the lines required money. Grants were difficult to qualify for, while the loans were difficult to apply for, she said.
“It’s kind of like sending your kid to college,” Brewster said. “You don’t have enough money to pay it outright, but you don’t qualify for any grants. So [rural] communities are in that kind of situation a lot of times. You’re just kind of stuck.”
In a 2020 report to state lawmakers, TWDB said that all rural, irrigation, reuse and conservation projects that submitted full SWIFT applications have been funded.
TWDB communications manager Kaci Woodrome said in a statement that the agency receives far fewer SWIFT applications from rural communities than from large cities. Other programs are better suited to rural areas, she wrote, which can lead to less demand for the SWIFT program from small entities.
“The TWDB works with communities to evaluate these financial considerations and attempts to offer the best options available to meet the community’s needs,” Woodrome wrote.
But leaders in rural communities said the barriers span many of the agency’s programs. After Brewster took office, Van Horn hired an engineering firm to assess its water infrastructure needs and calculate an estimated cost — which totaled several times what the city could possibly take on as debt.
Rather than apply through SWIFT, Van Horn applied for a different loan program at the TWDB for drinking water projects that offers loan forgiveness. Even that, Brewster said, was a difficult undertaking and couldn’t have been done without a contractor provided by the Rio Grande Council of Governments.
“We don’t have a staff that has the time nor ability to do this,” Brewster said.
Fund fails to meet legislative target
The SWIFT fund has also struggled to provide assistance for water reuse and conservation projects, which lawmakers had hoped would account for a fifth of the fund’s loans. The fund also has missed those targets: Only 4% of loans were for reuse, and 3% for conservation projects.
“TWDB has been aware that the targets were not met despite significant outreach efforts,” Woodrome, the TWDB spokesperson, wrote.
She said the agency holds online and in-person workshops, meets directly with communities and works with other agencies to try to reach the communities with the greatest need.
Water experts said the agency has done a good job pushing money out the door, but rural projects need more attention. At the same time, the agency is limited by its own processes, said Carlos Rubinstein, a former Texas Water Development Board chair who is now a principal consultant for RSAH2O, an environmental regulatory and compliance consulting firm.
“[The board] expects projects to be fairly conceptually developed, including how you’re going to service the debt,” Rubinstein said. “And if [communities] fail to be able to carry the application through the process, there’s not much the board can do.”
Small communities need more assistance — whether from nonprofits, private foundations or others — to do what he calls the pre-development work. Otherwise, he said, those communities will continue patching one thing at a time when something breaks in their water infrastructure and never address systemwide problems.
“We need to avoid Band-Aid fixes,” Rubinstein said.
Jennifer Walker, the deputy director of the Texas Coast and Water Program at the National Wildlife Foundation, has worked on Texas water supply problems for several years and said she agrees with the Sunset Commission’s staff recommendation to require that TWDB develop an outreach plan to reach communities that don’t apply for financial assistance.
“We know big cities with specialized staff and consultants on retainer are applying, and that’s great, but are we really reaching all parts of the state?” Walker said. “I think everybody knows that this is a question that needs to be answered. But it’s really time for [the agency] to do that.”
Rural communities miss out
In Presidio County, home to Marfa in West Texas, the local groundwater district is charged with ensuring there will be enough water in the West Texas Bolsons and Igneous aquifers to support development well into the future, but currently it has little information on how much water each individual landowner is using, in part because so many locals have their own water wells.
The district is supposed to monitor water quality and aquifer levels, but in reality, it doesn’t have the money to do so effectively, said Trey Gerfers, chair of the Presidio County Underground Water Conservation District.
Local officials recently applied to the TWDB for money to build groundwater monitoring wells to help them do so, which Gerfers said would allow the district to approve well permits based on accurate data, rather than what he says is happening now: “[We’re] promising the moon and hoping everything goes OK.”
But the TWDB application process is very technical. Small rural areas like Presidio County don’t have the same level of expertise to compete with large cities, he added.
“In a place like Houston, which has a room full of people who can apply for these kinds of things, they’re getting hundreds of millions [of dollars] from the state,” Gerfers said.
Without outside help from nonprofit groups, they wouldn’t have been able to submit an application for funds, he said.
Rural Texas communities also often rely almost exclusively on aquifers, and Vanessa Puig-Williams, the director of Texas Water Program for the Environmental Defense Fund, said the TWDB’s programs don’t provide specific funding for aquifer management.
“That’s an important piece of this conversation that’s missing in rural areas of Texas, because aquifers are infrastructure in rural Texas,” Puig-Williams said.
More than 70% of Texas is currently experiencing a severe drought, according to the U.S. Drought Monitor, which has already contributed to wildfires across the state. Droughts tend to put pressure on groundwater resources: During the severe 2011 drought, groundwater supplied almost two-thirds of the state’s increase in water consumption.
Gerfers said he worries that aquifers serving rural communities will only be more stressed in the future as climate change continues to bring higher average temperatures and intensifies droughts.
“With population growth in Texas, with the prospect of longer, hotter, drier summers, more intense droughts, I mean, we’re just kidding ourselves if we don’t get a handle on this now while we have the chance,” Gerfers said.
Disclosure: Environmental Defense Fund has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.
This article originally appeared in The Texas Tribune at https://www.texastribune.org/2022/04/07/texas-rural-water-projects-swift/.
