The average Palmview resident will pay $77.82 for water and sewer services once the sewer system is up and running in the city.
At an Agua Special Utilities District meeting last week, financial advisors from First Southwest went over the financial aspects of getting sewer service to the Palmview area, a project years in the making.
“I know we talked to the commission of Peñitas and we actually wanted to invite them to have a say-so because, ultimately, this person will be representing that area,” said Agua SUD President Everardo Chapa. “We felt it was very important to work together.”
The city of Peñitas held a special meeting last week and voted in favor of Loya with Commissioner Ramiro Loya, Lloyd Loya’s dad, abstaining.
Lloyd Loya will be sworn in at the next Agua SUD board meeting.
On the Palmview project, Cris Vela, with First Southwest, told Agua SUD board members the market interest rate for loans is 4.25 percent, but Agua SUD will be paying 2.96 and 2.50 percent on the two loans from the state that will help fund the sewer system.
The entire project cost is estimated at $42.2 million, and nearly $32 million of that is grant money from the Texas Water Development Board. Original plans for the project included a new sewer plant and had been awarded $40 million in grant funding and only $2 million in loans, but an $8 million grant was pulled when the scope of the project changed.
Palmview’s project ran into a roadblock when the city of Mission filed a restraining order against Agua SUD. The property planned for the sewer plant falls within Mission’s city limits and Mission leaders were adamant they didn’t want another sewer plant in the city.
Eventually, the city of Mission and Agua SUD reached an agreement that Agua SUD would construct a lift station and direct the sewage to the Mission plant. The cost of the project remained about the same, but the Border Environment Cooperation Commission had awarded an $8 million grant for a sewer plant, not a lift station.
Agua SUD asked to direct the money toward the lift station, but the environmental commission has not given the agency an answer, so Agua SUD was forced to take the $8 million as a loan from the Texas Water Development Board.
That loan drove the cost of the sewer service up for Palmview customers responsible for paying back the debt.
Instead of charging Palmview customers $6.26 monthly to pay off the debt, Agua SUD will need to charge $26.53 monthly. On top of that, there’s a $15 charge for maintenance and operation. With an estimated $36.29 water payment (for 10,000 gallons of water usage), the total bill, excluding trash, is $77.82.
Chapa asked how the cost compared with the new Sullivan City sewer rates, but Frank Flores, general manager of Agua SUD, reminded the board that Sullivan City’s project was funded with 98 percent loans, meaning there was significantly less debt to pay off.
It is, however still possible for the Border Environment Cooperation Commission to fund transition assistance for the debt. He said that was an option given when the Sullivan City sewer plant was constructed. The assistance pays off a portion of the bill until customers get used to the full payment.