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Abilene staff outline accelerated PFAS response and $300M‑plus water CIP options; council urged WIFIA/TWDB plus partial cash
Summary
Utilities staff presented an expedited plan to address new PFAS limits and an updated $300M+ master‑plan timeline. Staff modelled funding scenarios (all cash, municipal debt, TWDB/WIFIA debt, and TWDB/WIFIA plus cash) and recommended a mixed approach to minimize long‑term interest and rate impacts.
City water staff reviewed an updated master plan and an expedited timeline to comply with newly proposed federal per‑ and polyfluoroalkyl substances (PFAS) limits and to address aging plant capacity and reliability.
System context: Abilene’s water system currently treats surface supplies at multiple plants. Staff described the operational tradeoffs of the three‑plant footprint and said the Grimes plant has reached the end of its structural life; engineering analysis recommended retiring Grimes and reallocating capacity to Hargisheimer (south) and Northeast (north) while building a crosstown connection so south‑side plants can receive treated water in constrained scenarios.
PFAS and capital needs: The EPA’s proposed MCLs (4 ppt/10 ppt) trigger required treatment by April 2029. Initial sampling showed two raw sources above those levels. Engineering staff presented a broad PFAS treatment cost range of roughly $60–150 million for treatment alone; combined with other master‑plan projects staff presented total program costs that could exceed $300 million in current‑dollar terms after recent construction‑cost escalation.
Funding scenarios and rate impacts: Staff modelled four funding approaches: all‑cash pay‑as‑you‑go (highest near‑term rate increases but lower lifetime interest), municipal debt (COs) financing, TWDB/WIFIA‑sourced debt, and a hybrid TWDB/WIFIA plus accelerated cash paydown. The hybrid approach — using low‑cost federal/state loans and deliberately building cash to prepay principal when WIFIA payments start — produced lower long‑term interest costs and smoother rate impacts in staff modelling. Staff warned that timelines and costs remain uncertain and that PFAS regulatory outcomes in federal court could change scope and schedule.
Operational items: Staff noted the PK RO (reverse‑osmosis) raw‑water treatment and associated concentrate discharge remain on a fast track; bringing that plant online will create new operating costs (estimated roughly $1.8M/year) that are not reflected in the CIP models until the council decides how to recover operations (rate increases vs. a small recurring fee).
Council direction: Council asked staff to pursue TWDB/WIFIA applications where appropriate, continue refining grant and debt packaging, and return with updated rate impact scenarios and detailed cash vs. debt comparisons. No decisions were made at the workshop.
Next steps: Staff will prioritize NEH expansion and PFAS treatment design, continue pricing updates, and pursue state/federal funding opportunities while updating the council on refined cost estimates.
