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HARLINGEN — For the second time, the Harlingen WaterWorks System’s turning to the state to help fund the city’s biggest project — a $258 million, five-year plan aimed at overhauling its old sewer system.
Now, officials are requesting the Texas Water Development Board grant an $11 million low interest loan likely calling for a 30% WaterWorks match.
So far, David Sanchez, WaterWorks’ interim general manager, believes the agency’s “green-lighted” to land the loan.
At WaterWorks offices, officials are counting on the Water Development Board granting a 2.55% interest rate.
Meanwhile, the Federal Reserve System is expected to slightly trim interest rates.
While the state would fund 70% of the loan, WaterWorks’ share would run about 30%.
With WaterWorks’ revenue set to pay more than $2oo million, officials are planning to request the Water Development Board grant further funding to help finance the $258 million project.
Last year, officials launched the project, aiming to upgrade the sewer system to meet the city’s increasing demand.
Now, some pipes are overflowing.
“We’re in the planning stage,” Sanchez said in an interview. “We’ve got engineering to do. We’re just scratching the surface.”
On the drawing board, officials are working to design the sewer system’s headworks along with the project’s central pipeline known as an interceptor line.
To help WaterWorks launch the project, the Water Development Board granted the agency a $10 million low interest loan in September 2023.
By July, officials were securing the loan through the sale of about $10 million in revenue bonds.
Through its Clean Water State Revolving Fund program, the Water Development Board granted WaterWorks the 30-year loan at a 2.55% interest rate, which was 1.21% lower than the market rate, projected to save $2.4 million, Anne Burger Entrikin, the city’s financial advisor with First Southwest Co., said.
During the 30-year loan’s term, running from 2026 to 2055, the city’s projected to pay $14.2 million in debt service, she said.
In September 2023, the Water Development Board granted WaterWorks the low interest loan based on records showing Harlingen’s “financials are excellent,” board members told city officials.
As part of the city’s request, Mayor Norma Sepulveda told board members the loan would “lighten the load” for utility customers, helping to reduce water rate increases set to help fund the $258 million project.
Under the master plan, the city’s set to finance $210.6 million, a WaterWorks document shows.
To help fund the project, city commissioners are boosting water rates by about 50% during the next five years.
In April, commissioners approved a WaterWorks-recommended water rate plan raising the city’s minimum monthly charges for customers on 5/8-inch water meters from the current $7.93 to $9.91 this year then to $23.23 by 2028.
As customers use more water, rates will climb.
The series of water rate hikes are projected to increase average monthly bills from the current $30.58 to $33.58 this year, then to $63.53 by 2028.
Meanwhile, the city’s monthly minimum sewer charge for customers on 5/8-inch meters is set to increase from the current $6.18 to $7.79 this year, then to $19.63 by 2028.
For years, WaterWorks officials have been planning the $258 million project, aiming to overhaul the aging sewer system to make room for future growth while some pipes are overloading, spurring sewage spills.
During a five-year period, they’re planning a series of major projects, including building the central interceptor pipeline, along with its trunk lines, while installing gravity lines to replace old lift stations.
