McAllen approves resolutions and ordinances to advance groundwater desalination project and buy water rights
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Summary
City leaders approved a $30 million financing closing to build production wells for a groundwater desalination project and authorized purchase of water rights; the Public Utility Board and City Commission approved related resolutions and ordinances during the joint meeting.
The City of McAllen and the Public Utility Board voted on a package of actions to advance a groundwater desalination project and to acquire additional surface-water rights.
Mark Vega, presenting to the City Commission and Public Utility Board, described item 2 as “the first of 5 closings” and said the closing would provide $30,000,000, with roughly 90% of those funds intended to construct production wells and about 10% for design. Vega told the meeting the wells program covers about eight wells — four deep and four shallow — and that the city plans to advertise the production-well bid package in spring 2026. “This first closing of $30,000,000 is to construct these deep and shallow wells,” Vega said.
Vega said the true interest cost for the first closing is about 3.82 percent, reflecting a subsidy leveraged through the Texas Water Development Board program. Anne Berger Entreken, identified in the presentation as the city’s financial advisor, described the state subsidy as part of the State Water Implementation Revenue Fund for Texas (SWIRFT) and said McAllen’s subsidy effectively reduced the borrowing cost; “The specific subsidy that McGowan is going to get is a 14% subsidy,” Berger Entreken said.
Item 3 seeks authorization to purchase water rights from Hidalgo County Irrigation District No. 1. Vega described the acquisition as a volume of water rights read during the presentation as “13 33 acre feet”; the transcript is not clear on the exact figure and the workshop materials provided at the meeting were not included in the public transcript.
Vega said the $30 million closing primarily funds permanent production wells and that staff plan a four- to five-year build timeline for the desalination project. He also said that bidding for the wells is expected next spring and that securing the lower interest cost was a positive development for the project.
The Public Utility Board took action to approve items 2 and 3; the City Commission subsequently voted to approve related ordinances (items 4 and 5) that the staff said are necessary to implement the financing and water-rights acquisition. The transcript records motions and seconding for both the PUB action and the City Commission ordinances and a voice vote in favor; the meeting audio records multiple “Aye” responses and the chair announced that motions carried.
No ordinance or resolution numbers were recorded in the public workshop transcript. The presentation included a funding overview, estimated use of proceeds, the anticipated interest rate after state subsidy, and a project timeline. Staff did not present a final contract or recorded the exact acreage figure for the water-rights purchase in the transcript; the speaker’s spoken figure appears in the record but is unclear.
Votes at a glance: Item 2 (first financing closing, $30,000,000 for production wells) — approved by the Public Utility Board (voice vote) and supported by the City Commission; Item 3 (authorize purchase of water rights from Hidalgo County Irrigation District No. 1) — approved by the Public Utility Board (voice vote) and supported by the City Commission; Items 4 and 5 (ordinances implementing financing and water-rights acquisition) — approved by the City Commission (voice vote).
