District Financing Update

February 25, 2021

Lake McQueeney Water Control and Improvement District No. 1

District Financing Update

Update 2/26/2021: This article was updated to add supportive documents and clarify information applicable to Lake McQueeney WCID, along with directions on viewing the recorded February Board Meeting.

The Board of Directors of Lake McQueeney Water Control and Improvement District No. 1 announced at the February board meeting that the Texas Water Development Board (TWDB) approved a $40 million funding commitment, available for the purpose of rebuilding the Lake McQueeney spill gates. 

The District has qualified for a net effective rate of 1.48%, a low interest rate comparative to industry historical standards. For a detailed look at the interest rates over the life of the loan, please visit the TWDB February 8, 2021 Board Agenda #10 Document.

The TWBD financial models linked above were part of the approved funding request from Guadalupe-Blanco River Authority (GBRA) to the Texas Water Development Board, and were for illustrative purposes only. These financial schedules, at a minimum, did not take into account additional District funding specifically tied to Lake McQueeney: hydroelectric revenues provided by GBRA, updated ESTIMATED project amount of $36 million, and changes in projected property tax values over time.

Terrell Palmer, Financial Advisor for the District, presented a comprehensive update, which included the abovementioned items, on the Bond Issuance tailored to Lake McQueeney at the February Board meeting after the TWBD document was discussed. For a detailed look, please visit the Bond Issuance Update - 2/11/2021. To watch the presentation, visit the meeting notice news post and fast-forward the video recording of the meeting to the 18:22 mark. 

Several benchmarks must be achieved before construction of the dam can begin. The first hurdle is receiving access to financing which can occur after the conclusion of the election contest, ORDER: No. 20-2549-CV-C, Bruington v. Lake McQueeney WCID No. 1, et al, in the 25th District Court. The interest rates provided by the TWDB are subsidized, but the final rate is based on market conditions. Therefore, the District cannot lock in the interest rate until litigation is complete. Following the completion of the election contest, the District can receive the final engineering report and then send the project out to bid. The Board has been anticipating the financing decision by TWDB for months, and this approval for availability of funding is an important step toward the reconstruction of the dam.

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