The neighboring areas of Texas Rio Grande Valley, near the United States and Mexico border, have faced complicated water issues for years. According to the article from the Texas Tribune, colonias on the border struggle with decades-old water issues; their treatment facilities, pipes, wells, and septic tanks are too old, and the communities cannot afford to purchase new ones. The residents have to create ways to access water resources for their families. They sometimes rely on bottled water to obtain clean water. The word “colonia” means neighborhood in Spanish, which is what these communities have become
Falcon Rural WSC is the nearest water supply corporation to these small communities. Several families depend on Falcon Rural Water Supply Corporation for safe drinking water.
The corporation began on September 6, 1966, as a nonprofit corporation that provides rural water service to approximately 1,300 low-income colonia families and businesses living and operating within Starr and Zapata County. Most families reside in Zapata County in colonias, Salineno, Los Arrieros, Falcon Heights, Lopeno and Chihuahua Ranch.
In the spring of 2021, Falcon Rural WSC discovered that they must relocate their water lines in Zapata County to accommodate a Texas Department of Transportation (TXDOT) project. The project engineer approached Communities Unlimited (CU) to assist in funding the relocation. After researching, CU determined that the corporation might be eligible for funding if the United States Department of Agriculture Rural Development (USDA-Rural Development) could verify that its current Community Loan Fund (CLF) was suitable for takeout from the new project funding.
The entire existing water system infrastructure funding came from the USDA-Rural Development. Since its creation 54 years ago, Falcon Rural WSC has grown to 1,367 water connections. USDA-Rural Development funded most of the water supply corporations in Starr County. Recently Falcon Rural WSC and others have relied on CU’s Community Loan Fund for emergency repairs to restore service and for use as interim monies to fund the engineering costs. CU has a long history of working with these communities, colonia’s funding resources are limited, and the USDA-Rural Development 306c plan can make their projects affordable by providing grants. CU has a good working relationship with Zapata County and has been an assistance provider to Texas for some time. Colonias in Texas have a long-standing negative connotation due to its residents’ poor quality of life because of the lack of infrastructure along the border for many years.
One of the USDA-Rural Development requirements is for the applicant to secure private right-of-way from potential customers or owners, which makes it challenging for the applicant to complete the acquisition of easements and properties. This is not a popular element of satisfying the conditions to reach the project bidding stage. The Texas Department of Highways and Transportation (TXDOT) is widening U.S. Highway 83 and expects all utilities to relocate their services at their cost before beginning construction. Thanks to the USDA-Rural Development recommendations, most, if not all, of the waterlines and equipment are located in the private right-of-way. The water supply corporation hired Dan Campos, P.E. from Harlingen, Texas, to prepare the engineering and secure new easements. The cost of relocating the water lines and assets associated with the water system has reached $2 million. Thanks to the USDA-Rural Development policy, the project is over 95% reimbursable from TXDOT.
However, the keyword is “reimbursable.” How many small water supply corporations have $2 million in reserve to fund the project?
This brought in the Communities Unlimited Lending Team, Bryn Bagwell, Director of Lending, Kevin Tillman, Small Business Lender, and Dan Campos, P.E. After the technical assistance provider attended numerous meetings with the TXDOT consultants, project engineer, and CU’s Environmental Team, a collaboration formed between all involved parties. They agreed on front portions of the construction cost in advance of reimbursement. The key was developing a disbursement schedule that specified when and how the disbursements would come and when to expect a refund. This integrated project team approach in working with the engineer, community, city, and agencies ensured a positive flow of transition monies to complete the project.
The waterline relocation project will allow the corporation to make the needed waterline adjustments so that TXDOT can move forward with its proposed roadway construction. The project will also replace approximately 27,390 feet of the water line that has been in service for around 49 years. This will allow Falcon Rural WSC to assist the communities better.
The CU loan allows the corporation to complete the necessary planning, design, and land acquisition tasks needed to close the previous colonia Water Improvement Project that USDA-Rural Development previously funded.
Communities Unlimited, South Texas Coordinator Raul Gonzalez, began working with Falcon Rural Water Supply Corporation to revise easement policies to assist the project engineer in relocating the water line. CU also provided a deferred payment plan to address the slow collection practice that caused significant concern with securing funding. Raul assisted Falcon WSC with the USDA-Rural Development and Letter of Conditions (LOC) and worked throughout the process to ensure that all requirements received attention.
In the summer of 2022, CU worked with Falcon Rural WSC Project Engineer Dan Campos to verify that all invoices went through acceptance and approval by TXDOT. Dan Compos and CU’s Lending Team met via Zoom to ensure that all reimbursement requirements were complete.
Raul stated that the consulting engineer went far beyond his role as project designer and worked directly with management and the board president to meet the conditions for funding the project. He also ensured that the project met all TXDOT rules for reimbursement requirements. Raul has been the primary contact for funding issues, Financial Management, and Technical Assistance.
The technical assistance providers coordinated and attended the loan closing to ensure the board members understood the project flow’s scope and terms of constructability. The last part of the project development needs was to revise water supply corporation service policies as necessary in advance of securing new right-of-way documents. The technical assistance provided sample USDA-Rural Development, approved easement forms, and denial forms to notify owners that refuse easements will not be able to secure water service in the future until they give an easement and pay for the relocation of the water lines.
As of the summer of 2022, CU and USDA-Rural Development, Dan Campos, P.E., and the board president are engaged in providing short-term and long-term funding needs and technical assistance in the colonias. With everyone’s continued participation, the project will stay on track to assist these communities with their needs.