North Harris County Regional Water Authority

An Overview

North Harris County Regional Water Authority

An Overview

presented to

Southeast Texas Chapter of the TAWWAFebruary Meeting

February 19, 2004

Water-Levels Declining Water-Levels Declining

Evangeline Aquifer

• 3.3 million people• 1.1 million ac-ft annual water use• 656,000 ac-ft municipal use• 373,000 ac-ft mun. gw use • 283,000 ac-ft mun. sw use•Population to double in 30 yrs

Harris County (1977-1995)

H

T

X

A

S

A

R I S G A L VE

E

ST ON

CO

AS

T

AL

S U BS I D E N C ED

I ST

RIC

T

B U D

R

District Regulatory Plan1999

Adopted April, 1999

Harris-Galveston CoastalSubsidence District

1660 West Bay Area Blvd.Friendswood, Tx. 77546-2640

(281) 486-1105

www.subsidence.org

Amended September, 2001

• Set specific timetables for GW reduction

• Required submission of Groundwater Reduction Plan (GRP)

• Disincentive fee for failure to submit GRP as required ($3.00per 1,000 gallons of water pumped).

State Response to the Problem

State Response to the Problem

• (HB 2965, 76th legislature) Creation subject to 1/15/2000 confirmation election (9:1)

• To be run by elected 5-member Board of Directors• Major powers and duties;

– Conserve/protect groundwater; assess pumping fees & other user fees

– Acquire “wholesale” surface water & treat, store, distribute & resell to MUDs, etc. for sale to retail end users

– Enter into contracts; participate in water planning/water conservation

– Authorize financing, engineering, construction, operations of wholesale surface water supply system

– Authority to issue revenue bonds; no taxing authority, etc.

Legislative Amendments (HB 1110)

Legislative Amendments (HB 1110)

• Make Authority boundaries coincide with County Voting Precinct boundaries

• Make Authority boundaries coincide with MUD boundaries

• Clarify rights of eminent domain• Better define process for bringing in new

MUDs from outside Authority boundaries• Eliminate exemption for wells pumping 10M

gal. Or less• Monitor other regional water supply and water

issue legislation in best interests of Authority customers

MISSION STATEMENT…MISSION STATEMENT…

• Promote water conservation.• Identify/provide cost-effective alternative

water sources.• Maintain regulatory compliance.• Encourage intergovernmental

cooperation.

To find and assure a long-term supply of quality drinking water at the lowest

responsible cost.

• 337square miles• 400,000 residents

Some Basic StatisticsSome Basic Statistics

• 1,612 gw wells

• 160 Water Districts• 70 MGD water

demand

River Authorities & Water Rights Remote GroundwaterResources

City of Houston Cost Effective & Fair

What process did the Authority follow to obtain its water supply?

• Untreated Water Capacity• Treated Water Capacity• Transmission Lines

CoH Water Contract Components

City of Houston Water Supply Contract Principles/Terms:

Raw Water• Pay pro-rata share of remaining debt service

of Houston raw water facilities/online 2002.• Pay for raw water when treated water is

delivered.• Pay for raw water facilities O&M

when treated water is delivered.• Future raw water facilities –

based on pro-rata share and payment due at time of reservation or when contract commences.

City of Houston Water Supply Contract Principles/Terms:

Treatment Facilities

• Houston responsible for operation and maintenance of facility.

• Pay for pro-rata share of capacity needed.• Capital payment can be deferred until time

of water delivery by making interest only payments.

• Pay pro-rata share of O&Mat time of treated water delivery.

City of Houston Water Supply Contract Principles/Terms:

Transmission Lines• Houston owns, operates and maintains

transmission lines within corporate limits, and some in unincorporated area.

• Pay pro-rata share of capacity needed.• Capital payment can be deferred until delivery

time by making interest only payments.• Pay pro-rata share of O&M at

time of treated water delivery.

Groundwater Reduction Plan

Groundwater Reduction Plan

• Prepared to meet HGCSD mandates:- 30% conversion by January 2010- 70% conversion by January 2020- 80% conversion by January 2030

• Authority prepared and submitted GRP to HGCSD

• Authority’s GRP certified by HGCSD – 6/11/03

Conversion To Surface WaterConversion To Surface Water

Q. WHAT IS THE AUTHORITY’S GRP?

A. It outlines how the Authority will comply with HGCSD requirements and defines:

• The anticipated water needs through 2030• How much surface water (SW) is needed

to comply• Identifies the source of this SW• Identifies the system to deliver/distribute SW• Estimates the cost of the required

infrastructure• Defines the mechanisms to fund the

infrastructure• Defines the GRP implementation mechanism.

COMPLIANCE PHILOSOPHYCOMPLIANCE PHILOSOPHY

• Impractical to deliver SW to all districts.• Address known areas of water quality and

quantity issues.• Serve a core, compact area, some 47

districts, in 2010.• Phase in additional districts in 2020 and 2030• Build a technically sound, practical and

economical system of infrastructure to meet HGCSD requirements.

• Implement a fair pricing policy to pay for the system.

NHCRWA system to be built in phases to allow compliance with HGCSD mandates and will consist of:

• Approximately 38 miles of transmission line

• Approximately 126 miles of distribution line

• 3 Pump Stations• 4 Regional Water Plants• 32 Regional Wells

The estimated cost (in million dollars) of the system to meet each target year is:

2010 2020 2030

Transmission Lines 74.719 145.622 0

Distribution Lines 96.050 211.467 26.512

Pump Stations 8.712 16.795 3.811

Regional Water Plants 11.709 30.432 5.220

Regional Wells 11.330 29.515 4.110

Total 202.520 433.831 39.653

Q. GRP IS CERTIFIED…WHERE DO WE GO FROM HERE?

A. HGCSD regulations require construction on infrastructure to begin by January 2005, however, some districts have water quality/quantity problems, declining well levels, aging district infrastructure and growth issues to be solved before 2010.

THE SOLUTION…The Groundwater Transfer Plan

Implement theGroundwater

Transfer Program...

Q. What is the Groundwater Transfer Program (GTP)…

• Districts with excess capacity sell water to Authority.

• Districts that need water buy water from NHCRWA.

• Authority makes up supply deficits• System to convey the water consists

of components of the Authority’s proposed 2010 Distribution System

BENEFITS OF THE GTP:

• Addresses immediate and short-term needs.• Maximizes investment in existing district

infrastructure.• Minimizes investment in additional district

infrastructure which will have less than optimal usage.

• Minimizes the amount of debt the Authority would have to absorb under its current Pricing Policy.

• Minimizes number of new wells.• Primary system components consistent with

ultimate Authority system.

Potential GTP Participants:

Approximately…• 11 Seller Districts• 15 Buyer Districts• 3 Districts that are

seeking backup supply

GTP Highlights:

• 13 projects• Projects involve construction of

lines, wells, pump station(s) and water plant(s)

• Schedule calls for projects to go in service at various times from 2004 through the end of 2005

• Approximately 53% of the ultimate 2010 planned water distribution system will be constructed under the GTP.

GTP Highlights:

• Estimated cost of GTP including engineering, construction and real estate acquisition is approximately $85 million

• Funding will come from Authority’s 2003 bond sale.

How Will The System Be Paid For?

How Will The System Be Paid For?

Interim• $110 million line of credit• Pumpage fees

Long Term • Sale of bonds (initial sale $160 million)• Pumpage fees and sale of water

Bond Validation Suit

Obtained Judgment Validating: • Creation and Boundaries• All statutory purposes• Current Rate Order, including Import Fee• City of Houston Contract• Pledge of Revenues to Bonds• Issuance of Bonds• Proposed Expenditures of Funds• Legislative Solution to Annexation Issue.

NHCRWA INITIAL BOND SALE

• $124,685,000 Senior LienRevenue Bonds, Series 2003

• Marketed to the public on9-17-03

• Delivery date of funds 10-16-03• Proceeds $127,971,159.15• Rate /Yield

All cost of issuance included: 5.0575%Federal Arbitrage Yield: 4.9327%

NHCRWA INITIAL BOND SALE

• Issued to finance:~ Capital payment to City of Houston~ Design and construction of Phase I

water transmission network~ Capitalized interest and debt reserve

surety bond, and~ Cost of issuance of Series 2003 bonds.

NHCRWA 2004-2005 CAPITAL IMPROVEMENT PROGRAM

• NHCRWA’S first CIP program• Two year plan• Includes all projects to be undertaken

in 2004 and 2005.• Major components include:

~ Engineering Design and Management~ Real Estate Acquisition~ Construction and Construction Management~ Construction Materials Testing, etc.

NHCRWA3648 FM 1960 West, Suite 110

Houston, TX 77068281-440-3924

Visit online: www.nhcrwa.com