Notable SWIFT Projects

2015: The largest project receiving SWIFT-subsidized loans in 2015 was the Northeast Water Purification Plant expansion in Humble near Houston. Its purpose was to increase surface water supplies through additional treatment of water from the Luce Bayou Interbasin Transfer. The overall project included five individual WMSPs in the state’s Region H water planning area, each with its own sponsor. In all, the sponsors received nearly $1.3 billion in TWDB loans for planning, design and construction.

In 2018, this project received an additional $528.9 million and is now in the construction phase, with completion expected in January 2025. The plant expansion is projected to provide an additional 358,000 acre-feet in water supplies when fully implemented.

2016: The city of Austin received more than $80 million in SWIFT-subsidized loans for the planning, design and construction of an advanced water-meter infrastructure to reduce water losses due to old metering technology. The project is expected to provide 6,105 acre-feet in additional water supplies when completed in September 2023.

2017: TWDB loaned the Brushy Creek Regional Utility Authority in Cedar Park nearly $17 million for the planning, design, acquisition and construction of a regional facility to ensure sufficient water supplies for the cities of Cedar Park, Leander and Round Rock. In 2018, the project received an additional $15.7 million from TWDB and is now in pre-construction, with completion expected in June 2021. The project should provide about 14,500 acre-feet in additional water supplies.

2018: The city of McAllen received $6.9 million in SWIFT-subsidized loans to purchase water rights for municipal and industrial use. The project should be completed in September 2019 and will provide 3,000 acre-feet of water.

SWIFT ASSISTANCE

The program provides three broad categories of financial assistance: Low-interest loans: loans for WMSPs receive subsidized interest rates, with loan maturities ranging between 20 and 30 years. Deferred obligations: repayment of loan principal and interest can be deferred for eight years or until construction is completed. Board participation: TWDB assumes an ownership interest in the “excess” capacity of a project being built to accommodate greater future demand; the state’s share may be incrementally repurchased by the project sponsor. Financing terms vary but are generally for 34 years.

Other Financial Assistance Programs

TWDB also manages several other financial assistance programs, both state and federal, for water projects that may or may not be included in the SWP (Exhibit 2). The revolving funds are supported with revenue bonds while the remainder are funded by general obligation bonds.

REVENUE BONDS VS. GENERAL OBLIGATION BONDS

Revenue bonds are tied to specific projects intended to generate revenue to repay the bondholders. General obligation bonds are not necessarily tied to specific projects and are backed by the “full faith and credit” of the issuing government, with bondholders typically repaid through tax revenue.

The programs include the federal Clean Water State Revolving Fund and Drinking Water State Revolving Fund, which offer below-market loans to public or private entities, as well as principal forgiveness — that is, a waiver of some or all of the outstanding principal balance on a loan — for eligible disadvantaged communities or “green” projects. The former supports wastewater collection and treatment, while the latter provides loans for water treatment, infrastructure and source-water preparation and protection.

The Economically Distressed Areas Program offers financial assistance for areas of low median income where water and sewer connections do not exist or do not meet state standards. The program helps with planning, land acquisition, design and construction on new or improved supply, collection or treatment facilities.