State water board holds key to Proposition 6 projects

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omni_className = "article"; var omni_publicationDate = "2013-09-10 00:38:00"; var omni_sourceSite="chron"; // article specific variables var omni_authorName = "By Matthew Tresaugue"; var omni_authorTitle = ""; var omni_pageNumber = "1"; var omni_breakingNewsFlag = ""; var omni_localNewsFlag = "1"; var omni_premiumStatus = "isPremium"; var omni_premiumEndDate = "2037-01-01 06:00:00"; var omni_originalSource = "HC"; var omni_isListView = "0"; var omni_paywallSite = "1"; // ]]> </script>    <script type="text/javascript" id="adPositionManagerScriptTag" src="https://web.archive.org/web/20160729223752js_/http://aps.hearstnp.com/Scripts/loadAds.js"></script>   <meta name="msvalidate.01" content="9451CA04ABC9D1D5C6419C73B4C4F7B7"/> <title>State water board holds key to Proposition 6 projects - Houston Chronicle</title> <link rel="SHORTCUT ICON" href="/web/20160729223752im_/http://www.houstonchronicle.com/favicon.ico?v=3"/> <link rel="apple-touch-icon" href="/web/20160729223752im_/http://www.houstonchronicle.com/apple-touch-icon-precomposed.png"/> <link rel="apple-touch-icon" sizes="72x72" href="/web/20160729223752im_/http://www.houstonchronicle.com/apple-touch-icon-72x72-precomposed.png"/> <link rel="apple-touch-icon" sizes="114x114" href="/web/20160729223752im_/http://www.houstonchronicle.com/apple-touch-icon-114x114-precomposed.png"/> <link rel="apple-touch-icon" sizes="144x144" href="/web/20160729223752im_/http://www.houstonchronicle.com/apple-touch-icon-144x144-precomposed.png"/> <link rel="canonical" href="https://web.archive.org/web/20160729223752/http://www.houstonchronicle.com/news/houston-texas/houston/article/State-water-board-holds-key-to-Proposition-6-4800128.php"/><link rel="amphtml" href="https://web.archive.org/web/20160729223752/http://www.houstonchronicle.com/news/houston-texas/houston/amp/State-water-board-holds-key-to-Proposition-6-4800128.php"/> <meta name="description" content="Texas officials could leverage $2 billion from the drought-prone state's rainy day fund into $30 billion for new reservoirs, pipelines and other water-supply projects over the next half-century. Municipal finance experts say the projections for the revolving, low-interest loan program, if approved by voters in November, might be too rosy. Simply put, if the water board loads up early on reservoirs and other big-ticket items, the fund approved by voters might not stretch as far as the proposition's backers are betting. The ballot measure represents Texas' first attempt to fund the state's long-range plan to avert grave water shortages as its population grows over the next 50 years. The proposition's long and varied endorsement list includes farmers, home builders, beer distributors, oil and gas companies and environmental groups. The fund, as designed, would help local and regional entities seeking to build water-supply projects to raise money faster and less expensively than through usual channels. [...] the fund's structure changed as the plan passed through Legislature on its way to the November ballot, allowing part of the initial $2 billion to be used on debt service and thus not be an asset to finance future projects."/> <meta name="author.name" content="By Matthew Tresaugue"/> <meta name="author.title" content=""/> <meta name="date.release" content="2013/09/09"/> <meta name="time.release" content="19:38"/> <meta name="publisher" content="Houston Chronicle"/> <meta name="sections" content="News,Houston & Texas,Houston"/> <meta name="subject" content="environmental issue"/> <meta name="news_keywords" content="environmental issue"/> <script type="text/javascript" src="/web/20160729223752js_/http://www.houstonchronicle.com/js/hdn/omniture/video.js"></script> <meta property="og:title" content="State water board holds key to Proposition 6 projects"/> <meta property="og:description" content="Texas officials could leverage $2 billion from the drought-prone state's rainy day fund into $30 billion for new reservoirs, pipelines and other water-supply projects over the next half-century. Municipal finance experts say the projections for the revolving, low-interest loan program, if approved by voters in November, might be too rosy. Simply put, if the water board loads up early on reservoirs and other big-ticket items, the fund approved by voters might not stretch as far as the proposition's backers are betting. The ballot measure represents Texas' first attempt to fund the state's long-range plan to avert grave water shortages as its population grows over the next 50 years. The proposition's long and varied endorsement list includes farmers, home builders, beer distributors, oil and gas companies and environmental groups. The fund, as designed, would help local and regional entities seeking to build water-supply projects to raise money faster and less expensively than through usual channels. [...] the fund's structure changed as the plan passed through Legislature on its way to the November ballot, allowing part of the initial $2 billion to be used on debt service and thus not be an asset to finance future projects."/> <meta property="og:type" content="article"/> <meta property="og:url" content="https://web.archive.org/web/20160729223752/http://www.houstonchronicle.com/news/houston-texas/houston/article/State-water-board-holds-key-to-Proposition-6-4800128.php"/> <meta property="og:image" content="https://web.archive.org/web/20160729223752im_/http://www.houstonchronicle.com/img/pages/article/opengraph_default.jpg"/> <meta property="og:site_name" content="Houston Chronicle"/>  <meta name="twitter:card" content="summary_large_image"/> <meta name="twitter:site" content="@houstonchron"/> <meta name="twitter:creator" content="@mtresaugue"/>  <meta property="fb:app_id" content="653292111352579"/>  <meta property="vf:unique_id" content="premiumchron-article-4800128"/> <meta 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class="hdn-analytics" data-hdn-analytics="visit|Archive|navigation|16"> <span class="section-link" data-naveid="3387">Archive</span> </a> </div> </li> </ul> </div>  </div>      <div id="content"> <div class="article-wrap">   <div class="hdnce-e hdnce-item-46169"> <style type="text/css"> .share-access { width: 100%; margin: 0 0 20px 0; } .share-access img { width: 60%; display: block; margin-left: auto; margin-right: auto; } </style> <div class="share-access"> <a href="https://web.archive.org/web/20160729223752/https://myaccount.houstonchronicle.com/dsssubscribe.aspx?icmp=templateN&pid=525&z=00000"> <img src="https://web.archive.org/web/20160729223752im_/http://ww4.hdnux.com/photos/45/63/00/9908279/4/rawImage.jpg"/> </a> </div>  </div>  <div class="zone zone-1"> <div class="article-body">  <div class="article-head"> <h2 class="headline">State water board holds key to Proposition 6 projects</h2>  <p class="byline">By <a href="/web/20160729223752/http://www.houstonchronicle.com/author/matthew-tresaugue/">Matthew Tresaugue</a></p>  <span class="datestamp"> <span class="published">September 9, 2013</span> <span class="updated updated">Updated: September 10, 2013 12:46pm</span> </span> </div>   <div class="article-share">  <div class="social-links " social-url="http%3A%2F%2Fwww.houstonchronicle.com%2Fnews%2Fhouston-texas%2Fhouston%2Farticle%2FState-water-board-holds-key-to-Proposition-6-4800128.php%3Ft%3D8d4955a995%26cmpid%3D" social-hashid="" social-blurb="%20Texas%20officials%20could%20leverage%20%242%20billion%20from%20the%20drought-prone%20state%27s%20rainy%20day%20fund%20into%20%2430%20billion%20for%20new%20reservoirs%2C%20pipelines%20and%20other%20water-supply%20projects%20over%20the%20next%20half-century.%20%20Municipal%20finance%20experts%20say%20the%20projections%20for%20the%20revolving%2C%20low-interest%20loan%20program%2C%20if%20approved%20by%20voters%20in%20November%2C%20might%20be%20too%20rosy.%20%20Simply%20put%2C%20if%20the%20water%20board%20loads%20up%20early%20on%20reservoirs%20and%20other%20big-ticket%20items%2C%20the%20fund%20approved%20by%20voters%20might%20not%20stretch%20as%20far%20as%20the%20proposition%27s%20backers%20are%20betting.%20%20The%20ballot%20measure%20represents%20Texas%27%20first%20attempt%20to%20fund%20the%20state%27s%20long-range%20plan%20to%20avert%20grave%20water%20shortages%20as%20its%20population%20grows%20over%20the%20next%2050%20years.%20%20The%20proposition%27s%20long%20and%20varied%20endorsement%20list%20includes%20farmers%2C%20home%20builders%2C%20beer%20distributors%2C%20oil%20and%20gas%20companies%20and%20environmental%20groups.%20%20The%20fund%2C%20as%20designed%2C%20would%20help%20local%20and%20regional%20entities%20seeking%20to%20build%20water-supply%20projects%20to%20raise%20money%20faster%20and%20less%20expensively%20than%20through%20usual%20channels.%20%20%5B...%5D%20the%20fund%27s%20structure%20changed%20as%20the%20plan%20passed%20through%20Legislature%20on%20its%20way%20to%20the%20November%20ballot%2C%20allowing%20part%20of%20the%20initial%20%242%20billion%20to%20be%20used%20on%20debt%20service%20and%20thus%20not%20be%20an%20asset%20to%20finance%20future%20projects.%20" media-url="http%3A%2F%2Fwww.houstonchronicle.com%2Fimg%2Fpages%2Farticle%2Fopengraph_default.jpg" social-title="State%20water%20board%20holds%20key%20to%20Proposition%206%20projects"> <ul class="right"> <li class="socialIcon print"> <a class="hdn-analytics" href="javascript:hst_print();" data-hdn-analytics="print_article|article-4800128|article-share-premium|7"> <span class="icon"></span> </a> </li> <li class="socialIcon comments"> <a class="hdn-analytics" href="https://web.archive.org/web/20160729223752/http://www.houstonchronicle.com/news/houston-texas/houston/article/State-water-board-holds-key-to-Proposition-6-4800128.php#comments" data-hdn-analytics="comments_jump|article-4800128|article-share-premium|1"> <span class="icon"></span> </a> <div class="viafoura"> <span class="vf-counter vf-widget" data-widget="counter" data-path="http://www.houstonchronicle.com/news/houston-texas/houston/article/State-water-board-holds-key-to-Proposition-6-4800128.php"></span> </div> </li> </ul> <ul class="left"> <li class="socialIcon email" share-id="email"> <a class="hdn-analytics" href="" onclick="return false;" data-hdn-analytics="email_share|article-4800128|article-share-premium|1"> <span class="icon"></span> </a> </li> <li class="socialIcon facebook" share-id="facebook"> <a class="hdn-analytics" href="" onclick="return false;" data-hdn-analytics="facebook_share|article-4800128|article-share-premium|2"> <span class="icon"></span> </a> </li> <li class="socialIcon twitter" share-id="twitter"> <a class="hdn-analytics" href="" onclick="return false;" data-hdn-analytics="twitter_share|article-4800128|article-share-premium|3"> <span class="icon"></span> </a> </li> <li class="socialIcon pinterest" share-id="pinterest"> <a class="hdn-analytics" href="" onclick="return false;" data-hdn-analytics="pinterest_share|article-4800128|article-share-premium|4"> <span class="icon"></span> </a> </li> <li class="socialIcon reddit" share-id="reddit"> <a class="hdn-analytics" href="" onclick="return false;" data-hdn-analytics="reddit_share|article-4800128|article-share-premium|5"> <span class="icon"></span> </a> </li> <li class="socialIcon google" share-id="google"> <a class="hdn-analytics" href="" onclick="return false;" data-hdn-analytics="google_share|article-4800128|article-share-premium|6"> <span class="icon"></span> </a> </li> </ul> </div>  </div>  <div class="article-text">  <div class="sync-inline-overlay"> <div class="hdnce-e hdnce-item-47199"> <div class="fixed-asset perfectPixelWide ndn_embed" id="ndn-video-player-1" data-config-distributor-id="90000" data-config-width="100%" data-config-height="9/16w"></div> </div><p>Here's the promise of Proposition 6: Texas officials could leverage $2 billion from the drought-prone state's rainy day fund into $30 billion for new reservoirs, pipelines and other water-supply projects over the next half-century.</p> <div class="ad"><div id="adMiddle" class="ad-inner">  <div id="AP300" class="ad_deferrable"><script type="text/javascript">/*<![CDATA[*/ hearstPlaceAd("AP300"); /*]]>*/ </script></div> </div></div><p>The reality, however, could be very different. Municipal finance experts say the projections for the revolving, low-interest loan program, if approved by voters in November, might be too rosy.</p> <p>The state's ability to maximize the fund will depend heavily on which projects the Texas Water Development Board prioritizes for aid, among other factors, these experts say.</p> <p>Simply put, if the water board loads up early on reservoirs and other big-ticket items, the fund approved by voters might not stretch as far as the proposition's backers are betting. That's because the state's borrowing costs for those projects could restrict the growth of the new fund.</p> <p>"How the money will be apportioned is still unknown," said Ronald Kaiser, professor of water law and policy at Texas A&M University. "People are putting all their faith in the water board."</p> <div class="asset_relatedlinks"> <div class="article-related"> <h4 class="in-title">Related</h4> <ul class="rel-links"> <li class="rel-item "> <div class="rel-thumb">  <a class="without_u hdn-analytics" href="/web/20160729223752/http://www.houstonchronicle.com/news/article/With-drought-at-door-new-Texas-water-czar-faces-4760366.php" data-hdn-analytics="related_stories|article-4760366|article-4800128|1"> <img src="https://web.archive.org/web/20160729223752im_/http://ww2.hdnux.com/photos/23/33/13/5092041/5/premium_landscape.jpg" alt="Carlos Rubinstein will oversee billions of dollars in funding for water supply projects." border="0"/> </a>  </div> <a class="hdn-analytics" href="/web/20160729223752/http://www.houstonchronicle.com/news/article/With-drought-at-door-new-Texas-water-czar-faces-4760366.php" data-hdn-analytics="related_stories|article-4760366|article-4800128|1">With drought at door, new Texas water czar faces big job</a> </li> <li class="rel-item "> <a class="hdn-analytics" href="/web/20160729223752/http://www.houstonchronicle.com/news/houston-texas/houston/article/Brownwood-hopes-to-hit-a-water-gusher-4692379.php" data-hdn-analytics="related_stories|article-4692379|article-4800128|2">Brownwood hopes to hit a water gusher</a> </li> <li class="rel-item "> <div class="rel-thumb">  <a class="without_u hdn-analytics" href="/web/20160729223752/http://www.houstonchronicle.com/news/houston-texas/houston/article/West-may-be-able-to-tap-Perry-s-fund-4639596.php" data-hdn-analytics="related_stories|article-4639596|article-4800128|3"> <img src="https://web.archive.org/web/20160729223752im_/http://ww3.hdnux.com/photos/22/42/55/4860774/3/premium_landscape.jpg" alt="American and Texas flags fly side by side Friday in West, atop the destroyed remains of the fertilizer plant that exploded almost two months ago, killing 15 and injuring 200." border="0"/> </a>  </div> <a class="hdn-analytics" href="/web/20160729223752/http://www.houstonchronicle.com/news/houston-texas/houston/article/West-may-be-able-to-tap-Perry-s-fund-4639596.php" data-hdn-analytics="related_stories|article-4639596|article-4800128|3">West may be able to tap Perry's fund</a> </li> <li class="rel-item last"> <a class="hdn-analytics" href="/web/20160729223752/http://www.houstonchronicle.com/news/houston-texas/texas/article/Eyes-of-Texas-are-upon-the-Gulf-for-drinking-water-4590320.php" data-hdn-analytics="related_stories|article-4590320|article-4800128|4">Eyes of Texas are upon the Gulf for drinking water</a> </li> </ul> </div> </div><p>The ballot measure represents Texas' first attempt to fund the state's long-range plan to avert grave water shortages as its population grows over the next 50 years. The proposition's long and varied endorsement list includes farmers, home builders, beer distributors, oil and gas companies and environmental groups.</p> <p><em style="font-weight: bold;">562 projects</em></p> <p>The latest version of the water plan identifies 562 projects, including reservoirs, desalination plants and reuse efforts, at a cost of $53 billion. The state's share would be nearly $30 billion, or about the amount that could be grown from the $2 billion capitalization provided by the measure's passage. The remaining funding would come from local and regional entities and possibly private interests.</p> <p>Several lawmakers, including those behind the proposition, say the state's plan resembles a Christmas wish list. They have asked the water board to prioritize the projects.</p> <p>The board will look at a range of strategies to satisfy the state's growing thirst, but the solutions will vary by region, its new chairman, Carlos Rubinstein, said recently.</p> <p>Mary Kelly, who leads the Austin environmental consulting firm Parula, said the prioritization process "is going to be painful, but it's important because it asks, what is really needed over the next two decades?"</p> <div class="asset_zone zoneInlineE" data-config-asset-position="4"> </div><p>When pressed by lawmakers in January to prioritize projects, the state water board placed five reservoirs among the top 20, including the proposed Allens Creek reservoir about 50 miles west of Houston. The unofficial list focused on the areas with the highest population growth.</p> <p><em style="font-weight: bold;">Debt service takes a toll</em></p> <p>But pursuing too many of those expensive projects too soon may limit the growth potential of the State Water Implementation Fund for Texas. The fund, as designed, would help local and regional entities seeking to build water-supply projects to raise money faster and less expensively than through usual channels.</p> <p>The water board's models showed the fund, as proposed in January, could grow to about $30 billion over 50 years with interest earnings. But the fund's structure changed as the plan passed through Legislature on its way to the November ballot, allowing part of the initial $2 billion to be used on debt service and thus not be an asset to finance future projects.</p> <p>The board did not create models based on the changes, so it's unclear how they will impact the growth of the fund. But Melanie Callahan, who retired as its executive director in August, told board members at her last meeting that maximizing the new fund's potential will be challenging.</p> <p>Proposition 6's backers say they are confident the fund will help Texas meet its future water needs. They see creation of the fund as the next step in implementing the state's water plan. Even then, some water experts say, the state might not need to spend $30 billion on new water infrastructure. Some projects identified in the state's water plan are redundant, while others are a source of conflict between regions.</p> <p>Policy analysts also are skeptical of the projected needs, saying the estimate overstates demand by assuming each Texan in the future will use the same amount per day. Studies show people across the country are using less water now than they were 30 years ago.</p> <p>"As you look at the phasing of need, it doesn't happen for another few decades," said Sharlene Leurig, an expert on water-project financing at Ceres, a nonprofit group based in Boston. "But the expenditures will be made now, so we have to look closely at how we project demand.</p> <p>"Behaviors change, and technologies change," she said. "Change will occur, and we have to be flexible to those changes so that we don't have an overbuilt system."</p> <p>Kelly, the Austin-based water expert, said the state board should focus first on those projects that are easily permitted and cost-effective and do not harm the environment. For example, the state could invest in efforts to reduce water demand by agricultural irrigators in the Rio Grande Valley at the fraction of the cost of a reservoir, she said.</p> <p>"The 50-year focus distorts the question of what we should be doing right now," Kelly said. She cautioned: "Two billion dollars over 20 years is a good start, if it's spent effectively."</p> </div>  </div>   <div class="author-wrap"> <div class="authorinfo noborder last"> <img src="https://web.archive.org/web/20160729223752im_/http://ww1.hdnux.com/photos/21/63/73/4669148/3/premium_author_module.jpg" alt="Matthew Tresaugue"/> <h2 class="name"> <a href="/web/20160729223752/http://www.houstonchronicle.com/author/matthew-tresaugue/">Matthew Tresaugue</a> </h2> <p class="title">Environment Reporter, Houston Chronicle</p> </div> </div>    </div> </div>  <div class="zone zone-1" style="clear:both"> </div>  <div class="zone zone-3"> <div class="article-comments">  <div id="comments" class="hdn-comments">  <script> HDN.getAtCookie(); </script> <div class="treg-gya-commenting-bar"></div>  <div id="hdn-vf-comments"></div> </div> </div> </div> </div> <div class="zone zone-5">  <div class="hide-rss-link hdnce-e hdnce-collection-19498-premium_article_featured_articles">  <div class="collection article-sections"> <div class="column-outer-wrap"> <div class="column-wrap "> <div class="column odd firstcolumn"> <div class="header"> <h4 class="kicker-link"><a href="/web/20160729223752/http://www.houstonchronicle.com/local/houston/">Houston</a></h4> </div>  <a class="without_u " href="/web/20160729223752/http://www.houstonchronicle.com/news/houston-texas/houston/article/Hillary-Clinton-s-historic-moment-a-long-time-8515567.php"> <img src="https://web.archive.org/web/20160729223752im_/http://ww1.hdnux.com/photos/50/55/56/10673064/11/premium_article_featured_articles.jpg" alt="Democratic presidential candidate Hillary Clinton speaks during the First in the South Dinner at the Charleston Mariott Saturday, Jan. 16, 2016, in Charleston, S.C. 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State water board holds key to Proposition 6 projects - Houston Chronicle