EDINBURG — Hidalgo County commissioners are weighing short-term vs. long-term drainage projects as they prepare to ask voters to allow the drainage district to go out for bonds ranging between $50 million and $120 million.
Commissioners discussed the issue at length with Hidalgo County Drainage District General Manager Raul E. Sesin and the district’s financial adviser Noe Hinojosa during the commissioners meeting this week.
The discussion comes on the heels of what Sesin described as a “catastrophic event” of “hurricane proportions without the winds” in June and another round of heavy rainfall Saturday.
“We were spared because there was no wind damage that traditionally comes with a hurricane,” the district manager said of the recent June flooding that has now been declared a federal disaster.
Sesin and commissioners dispelled the notion that the drainage system had reportedly malfunctioned because of human error, saying all of the gates the county operates were opened and closed following the rules of hydraulics.
“We’re still accessing our system to provide a report as to how well it held up,” Sesin said.
The district is also assigning teams to each county precinct to evaluate issues and implement an aggressive plan to look for solutions, Sesin added.
“Obviously it takes time and money,” he said. “I know it’s easier said than done. I know a lot of people have suffered. It was a catastrophic act of God, and I think our system fared well.”
Many of the homes in the communities of Elsa and La Villa were spared because of the improvements made to the system in those areas, Sesin said.
“Traditionally we have reports that those areas get heavily inundated. It helped tremendously to have that system in place,” he told commissioners.
Still, there are homes in the Precinct 1 area that have been impacted by heavy rains time and time again, Commissioner David Fuentes said.
“It has happened before. It’s happening again. We need to continue to improve capacity because this is just not acceptable,” Fuentes told Sesin. “I task both of us and the people that we’re bringing onboard to get projects off the ground very quickly.”
Bonds, issues and deadlines
Voters approved a $184 million bond in 2012 and about $84 million were sold, the district’s financial adviser said.
“You still have about $100 million that have not been sold,” Hinojosa told commissioners. “Unfortunately… you’re in a tough spot.”
The language in the bond order has become an issue.
“Language challenges that we have in the actual order … make it cumbersome and difficult to sell,” Sesin said, suggesting the district do away with the remaining 2012 bonds and instead focus on new investments.
But if the district wants to borrow more money, it has to move quickly. By state statute, the district must ask voters for approval to go out for bonds even if it doesn’t affect the tax rate.
“In order to have a referendum for this fall, you have to do it pretty quickly,” Hinojosa said of the Aug. 14 deadline. “Today we’re July third, and it’s sort of exasperating to know that you have one project, but you also may have one or more projects.”
Hinojosa was referencing to the district’s short-term projects, or immediate needs which include a number of improvements to the current system in the eastern portion of the county, versus long-term projects, such as the $400 million Raymondville Drain, which would alleviate flooding in the western and northern parts of the county.
“(The) Raymondville Drain would not have made a difference in this area,” Fuentes said about the hardest hit areas in his precinct, which lies in the eastern portion of the county. “We worked from four in the morning until midnight for two weeks straight. Unfortunately, for people that lost their homes, it doesn’t really matter.”
Decision time
Investing in the Raymondville Drain, a long-term project more than 30 years in the making, has one big advantage: the federal government would return between 70 to 75 percent of the local investment.
“If you put in $100 million, you can get $70 million back and then reinvest it,” Hinojosa told commissioners. “Conceivably, you can get another 70 percent of that 70 percent. So that’s another $49 million. … You could get to the $400 million that way.”
But borrowing more than $50 million will require a tax rate increase, Hinojosa warned.
“If you go do $50 million it will not impact the tax rate,” he said. “If you raised one cent, you can do about $120 million.”
Both moves would require voter approval.
Currently, the district levies 9.5 cents per every $100 valuation. It spends five of those pennies on running operations and another 4 cents to pay its debt, Hinojosa said.
“We currently have annual (debt) payments of about $15 million,” Hinojosa said. “The issue is, how can we position this district to go out and do something (with) more of an impact to address your concerns?”
The financial adviser said he would not recommend the board issue a bond for just one project, such as the Raymondville Drain.
“We have a more immediate need in other areas,” Sesin said, adding he did want to invest some money in the long-term project. “My recommendation would be not to tie up the bond capacity on that one project.”
Either way, the district cannot move forward without the consent of the county’s residents.
“We’re just a storm away from catastrophe,” Commissioner Joseph Palacios said. “And I think the right thing to do is putting it in the voters’ hands.”
