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Recent CRMWA agreement will benefit Borger area

June 30, 2011

With the recent low levels at Lake Meredith a concern, the Canadian River Municipal Water Authority recently signed an agreement with Mesa Water, Inc. that will guarantee its member cities water well past the year 2100. PHOTO BY DON RICE

The recent signage of an agreement between the Canadian River Municipal Water Authority and Mesa Water will have a positive effect on the Borger area.
The signing of the water rights between the two entities took place on June 23 at the Plainview Country Club/Civic Center in Plainview.
Pickens and Mesa Water, Inc. sold the water rights beneath 211,000 acres for $103 million to CRMWA. The purchase gives CRMWA water rights for over 400,000 acres in the Texas Panhandle, almost all of which is located in Roberts County.
The purchase of the rights should be enough to ensure water is provided for citizens of the CRMWA communities beyond the year 2100, and involves around four trillion gallons of water. The water comes from the Ogallala Aquifer and lies behind land in Roberts County.
T. Boone Pickens acquired the rights earlier this decade through his organization in hopes of selling it to other cities across the state. However, after failing to find a buyer, he decided in April to sell it to CRMWA.
According to CRMWA General Manager Kent Satterwhite, the signage concludes over 10 years of negotiations between the two parties, going back to when Pickens formed Mesa Water in an effort to sell the water rights of the area controlled by the organization.
Borger is one of 11 member cities in CRMWA.
The other cities are Amarillo, Brownfield, Lamesa, Levelland, Lubbock, O’Donnell, Pampa, Slaton, and Tahoka.
Borger City Manager Eddie Edwards said that with the signage of this historic deal and the additional construction of production, storage, and distribution piping, the member cities of the Canadian River Municipal Water Authority will further reduce their reliance on Lake Meredith.
“This purchase, coupled with prior purchases of other water rights in the same area, create on of the largest groundwater reserves in Texas,” he said. “It will also protect and preserve fro the benefit of the Panhandle residents one of our most precious resources from being depleted and sold to large population centers down state.”
Edwards also said this ensures that the CRMWA will be able to continue to supply water to all of its member cities well past the turn of the next century.
Action was taken by the Borger City Council earlier this month to authorize participation in the CRMWA’s Subordinate Lien Revenue Bonds, Series 2011, and approve an amendment to the City of Borger’s conjunctive use groundwater supply agreement with CRMWA.
The resolution authorizes the city’s participation in the amount of construction costs. With favorable passage, the resolution maintains the City of Borger’s level of participation in the CRMWA at 5.549 percent since all member cities have now confirmed their participation in the acquisition of additional water rights.
During the council’s May 17 meeting, the council, in agreement with the city’s conjunctive use groundwater supply agreement (1996) with CRMWA, formally received the “Notice of Intention to Issue CRMWA Subordinate Lien Contract Revenue Bonds, Series 2011,” and also indicated the city’s preference on the level of participation, funding, and debt structure.
The CRMWA bonds will be issued in an amount not to exceed $93 million in proceeds and $1,275,000 in financing costs. The city’s share of the bonded debt will be $5,231,320.
According to Edwards, the one remaining variable is the interest rate, which will not be determined until the sale of the bonds has actually taken place, scheduled on or after July 15, 2011. Based on current estimates, the City of Borger’s 20-year debt service will be approximately $33,400 monthly starting this October.
He said it was the firm belief of the staff that revenue from water sales in one form or another should be used to fund the additional debt service. Edwards said with this in mind, there are a number of ways to provide a funding stream for the debt service, which include the following:
•Spreading evenly across all customers (base rate) would add approximately $6 per month to each customer’s water bill
•Volumetrically (in rates per 1,000 gallons), which would ratio the increase to each customer depending on consumption
•A combination of both base and rates, and/or increases in other revenue streams which would reduce the general fund’s dependence of revenue from water and sewer sales (currently budgeted at $750,000 annually)
Edwards said a 11-12 percent increase for water service should be expected in the proposed budget for 2011-12.
He said the purchase of water rights is an investment for the City of Borger’s future water resources, but its effect is unique in that it will receive no immediate benefit from the investment.
“This purchase is for water rights only and does not include any funding for additional infrastructure to actually pump said water,” he said.
Edwards said if Lake Meredith continues its decline, it is possible that another issue to fund the construction of what will likely be dubbed CRMWA2 could occur sooner rather than later. Fully participating at this time in effect pre-purchases roughly a 50 percent buy-in in CRMWA2 when it happens.
“Full development of CRMWA2 is expected to double the production capacity of 65,000 acre feet to 130,000 acre feet per year,” he said.
He also said staff plans to budget approximately $1.3 million to $1.7 million in next year’s proposed budget for additional water wells. Funding for preliminary engineering and exploratory test wells was approved in the current year’s budget.
Authorization was also requested to allow the balance of the water/sewer reserve fund to remain significantly higher than the council’s established goal of $3 million.
“This request was made in anticipation of funding additional water wells during the FY 2011-12 budget cycle without the need for additional debt,” Edwards said.

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