Water Supply

October 19, 2013
 

Proposition 6 – Frequently Asked Questions




Q. WHAT IS PROPOSITION 6?

prop-6-FAQA. Proposition 6 creates and constitutionally dedicates two new funds: the State Water Implementation Fund for Texas (SWIFT) and State Water Implementation Revenue Fund for Texas (SWIRFT). If the voters approve Proposition 6, the legislature has also authorized a one-time, $2 billion investment from the Economic Stabilization Fund (also known as the Rainy Day Fund) to be deposited into the SWIFT for the support of water supply projects in the state water plan. These funds are designed to make the financing of water projects through bonds more affordable for local entities and ensure that consistent, ongoing state financial assistance is available so that our citizens will have adequate water supplies during drought.

Q. IS MY COMMUNITY REPRESENTED IN THE STATE WATER PLAN?

A: Yes. Every community and every water user group in the state of Texas is represented. Water user groups include cities, rural water users, agriculture, livestock, manufacturers, mining, and steam-electric power. The 2012 State Water Plan addresses the need of roughly 3,000 water user groups across the state.

Q: WHAT WATER SUPPLY PROJECTS WOULD BE SUPPORTED BY PROPOSITION 6?

A: All projects in the state water plan would be eligible for support from the SWIFT and SWIRFT. These water projects range from conservation and reuse, to desalting groundwater and seawater, to building new pipelines and developing reservoirs and well fields, and include many other kinds of projects as well. Through the regional water planning process, local and regional water experts recommended these projects as the most efficient and viable ones for their communities.

Q. DOES PROPOSITION 6 SUPPORT WATER CONSERVATION?

A. The legislature has recognized the importance of conservation and reuse strategies in the overall management and protection of the state’s water resources. If the voters approve Proposition 6, financial assistance will be available for both new water supply projects and projects focused on conservation and reuse of existing supplies. Supporting legislation also provides that at least 20 percent of financial assistance will be targeted for conservation and reuse and at least 10 percent will support projects to serve rural areas, including agriculture irrigation conservation. The vital role of conservation is also promoted by requiring that applicants for assistance already have implemented effective conservation programs. This would help ensure communities use their water wisely and extend the life of their current supplies.

Q: HAS THE STATE CONSTITUTIONALLY DEDICATED FUNDS FOR WATER PROGRAMS IN THE PAST?

A: Yes. Texas’ first successful effort to dedicate funds for water programs in the state was in 1957. Voters passed HJR 3, a constitutional amendment creating the $200 million Texas Water Development fund and authorizing Texas Water development Board (TWDB) to use the funds in the form of loans for approved political subdivisions to use in the conservation and development of water resources. Since 1957, the Legislature and voters approved constitutional amendments authorizing the TWDB to issue up to $10.93 billion in Texas Water Development Bonds. To date, the TWDB has sold nearly $3.95 billion of these bonds to finance the construction of water- and wastewater-related projects.

Q: HOW WOULD THE SWIFT AND SWIRFT FUNCTION IN ADDITION TO PREVIOUSLY CREATED CONSTITUTIONAL FUNDS?

A: The creation of the SWIFT and SWIRFT would ensure proper administration of the new, one-time investment dedicated for the implementation of the state water plan and are intended to work closely with other constitutionally created funds. These funds specifically provide for an initial capitalization coupled with the state’s bond authority and allow the ability to leverage a $2 billion investment to finance nearly $30 billion over the next 50 years.

Q. HOW MUCH MONEY DOES TEXAS NEED FOR STATE WATER PLAN PROJECTS?

A: The total cost to implement all projects in the 2012 State Water Plan is approximately $53 billion. Of that, local and regional entities identified that $27 billion would be needed through state financial assistance programs.

Q. WILL THIS AMENDMENT COST TAXPAYERS?

A. No. Financial assistance from these funds would be used to support the issuance of bonds with bond proceeds loaned to local entities. Simply put, a bond is a loan. It is a contract to repay borrowed money with interest. Local entities request a loan from the TWDB, who, on behalf of the state, then issues bonds and loans the proceeds to the local entity for water-related projects. The local entities repay their loans with interest, and the TWDB then uses those funds to pay the scheduled payments on the TWDB-issued bonds.

Q. WHO WILL MANAGE THE FUNDS CREATED BY PROPOSITION 6?

A. The Texas Water Development Board. The TWDB provides water planning, data collection and dissemination, financial assistance and technical assistance services to the citizens of Texas. The 3-member Board considers loan applications from eligible applicants, awards grants for water-related research and planning, and conducts other TWDB business, such as approving the State Water Plan. Since 1957, the Legislature and voters approved constitutional amendments authorizing the TWDB to issue up to $10.93 billion in Texas Water Development Bonds. To date, the TWDB has sold nearly $3.95 billion of these bonds to finance the construction of water- and wastewater-related projects.

Q. HOW WILL THE FUNDS BE DISBURSED?

A. Communities and utilities would apply to TWDB for available financial assistance and funds would be disbursed for projects in the state water plan. The TWDB would evaluate and prioritize projects for assistance based on a state and regional process. Many factors will be considered in this evaluation, including the number of people served, the urgency of the project, the ability of the local and regional sponsors to support the project, and the degree of conservation achieved —just to name a few prioritization criteria.

Q. CAN THESE FUNDS BE USED TO HELP ADDRESS THE CURRENT DROUGHT EMERGENCIES SOME COMMUNITIES ARE FACING?

A. The legislation for these funds outlines several planning requirements and milestone dates. The funds would not be available until March 2015. In the meantime, entities may be eligible for emergency financial assistance through a number of other TWDB programs.

Q: WHO BENEFITS FROM PROPOSITION 6?

A: Texas. Cities, counties, water districts, river authorities, and non-profit water supply corporations are all eligible to use TWDB’s financial assistance programs in order to address implementation of state water plan projects. Ultimately, all citizens would benefit from keeping water rates reasonably low through the support of these funds.

 








 
 

 
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