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City told SRF ranked its pump-station and Hilltop projects No. 7; $10M grant cap and $49M loan limit shape financing
Summary
Engineers and bond counsel told the council Mineral Wells' SRF application ranked well (No. 7). Presenters outlined a financing illustration for a roughly $71'72 million package with a $10 million principal-forgiveness cap this fiscal year and up to $49 million in low-interest loans; remaining gap would require public-market financing.
City staff and outside advisers briefed the Mineral Wells City Council on the status of its Clean Water and Drinking Water State Revolving Fund (SRF) applications and an illustrative financing plan for large water-system projects.
Speaker 11 and bond counsel Rudy Segura (Speaker 9) said the city's project package, including the Brazos pump station, pipeline and the Hilltop water-treatment plant, scored number seven among roughly 298 eligible project information forms in the most recent SRF ranking. That position makes the city a competitive candidate for SRF invitations to apply if the Texas Water Development Board finalizes its intended use plan (IUP).
How SRF works: Rudy Segura explained SRF programs combine principal-forgiveness (grant-like) funds with low-interest loans. For the current fiscal year the board's cap on principal forgiveness was effectively $10 million per applicant and the maximum low-interest loan shown in the briefing was $49 million; together those sources could cover up to $59 million of a roughly $71'72 million project. Presenters noted the remaining gap (illustrated at about $13.4 million) would be financed in the public-market borrowing program and would affect rate planning.
Capacity and regulatory context: Consultants and engineers said TCEQ findings after Winter Storm Uri identified the Brazos pump station and related pipeline as limiting factors on plant capacity. Presenters said design work can begin after council and staff direction but cautioned the full design-bid-build timeline and long-lead equipment mean a construction fix is not immediate; they estimated bidding could occur within a year under non-SRF schedules but emphasized SRF involvement changes some timing and procedural steps.
Next steps: Presenters said once the TWDB finalizes the IUP and issues an invitation the city will have a short window to apply; staff will return to council for authorization to submit applications and to approve required financing documents. Finance advisers (including Hilltop, Valley View and NewGen referenced in the briefing) will update rate studies if loan and grant terms are confirmed. No financing commitment or council vote on an SRF application was recorded at the meeting.
Key numbers cited: project cost about $71'72 million, principal forgiveness cap $10,000,000 (this fiscal year), low-interest loan cap $49,000,000, illustrative public-market rate assumption ~4.25% for the remaining gap.
