AGENDA CAPTION:
Title
Consider approval of Resolution 2025-207R, approving a resolution by the board of directors of the Alliance Regional Water Authority (ARWA) authorizing the issuance of contract revenue bonds in the aggregate principal amount of $12,015,000.00 for the City of San Marcos, Texas in connection with the Regional Water Supply Contract Project, and approving other related matters.
Body
Meeting date: October 21, 2025
Department: Director of Utilities, Tyler J. Hjorth
Amount & Source of Funding
Funds Required: $280,525 for FY26
Account Number: 22033697 - Debt Service
Funds Available: Yes
Account Name: W-Ww Debt Service
Fiscal Note:
Prior Council Action: Council approval in 2008 for ARWA project participation; 2017-154R, 2019-203R, 2020-224R, 2022-237R, and 2023-208R, and 2024-209R approval of approximately $152,900,000 of debt; and other resolutions related to engineering services, etc.
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Background Information:
The City approved and executed the Regional Water Supply Contract effective January 15, 2008 for the financing, construction and operation of the Regional Water Supply Project. The City has previously requested the ARWA issue a separate series of contract revenue bonds for the City in an amount not to exceed $103,415,000 to finance the City’s contribution to the design, construction and equipment of the Phase 1A/1B Improvements of the Regional Water Supply contract.
In November 2024, during the ARWA treatment plant commissioning, it was discovered that the water supply from the Carrizo wells had elevated iron content, which was preventing the plant from achieving its design capacity. Because of the recent multiple years of drought and stress on the ARWA participating water supplies, ARWA approved the acquisition of temporary filtrations system to ensure 2025-27 capacities could be delivered. Permanent filtration solutions have been added to the scope of the 2027 plant expansion (known as Phase 1C/1D). The ARWA Board further approved SWIFT funding through the Texas Water Development Board in August 2025. San Marcos ARWA Board members who voted in support of both the interim and 1C/1D solutions were Marcus Naiser, Paul Kite, Joe Pantalion, Jane Hughson, and Tyler Hjorth.
This debt issuance covers the San Marcos portion of the ARWA for both the interim and permanent solutions. The ARWA principal amount for the permanent clarification and the temporary filtration units is $33.5M, with San Marcos’ share of $12,015,000.
This debt issuance was considered during the FY26 utility rate modelling, budgeting, and rate structures. Additional rate increases to cover this specific debt issuance are not anticipated beyond what was included in the FY26 financial preparations.
The other ARWA members are scheduled to approve their resolutions Oct 14-30, the ARWA Board will approve on October 31th, and ARWA will close on the loans by December 11, 2025.
Council Committee, Board/Commission Action:
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Recommendation:
Staff recommends approval.