2013 Texas Legislature Faces Water Drama of Epic Proportions

By Barbara Elmore

Old West movies often depict leathery cowboys crossing barren plains, hoarding water in their canteens for a long journey and scrapping for the last drop if the canteen feels light.

Today's water battles bear a striking resemblance. Substitute vast numbers of people for the cowboys, shrinking reservoirs and aging pipes for the canteens, and the picture facing Texas legislators as they convene in 2013 comes into sharp, dry focus.

Some lawmakers are writing a script that shows the state investing unknown amounts to keep the water flowing.Republican House Speaker Joe Straus of San Antonio, for example, calls the need for legislative attention "critical" as he travels around the state to talk up water. What form that attention will take is unknown, as a method for funding projects does not yet exist and the battle ahead appears to be difficultand protracted.

Complexities of water

Texas water issues are complex. Within the state's vast borders, water supplies in some areas are robust, while others are near-crisis. Some areas have large reservoirs that enable them to sell water to water-poor neighbors. Some municipalities depend on wells and implement strict conservation measures when rainfall is low and the water table drops. Other locales ask for voluntary conservation.

Competing budget interests—education, health care, transportation, immigration—also are vying for legislative attention.

Complicating the water picture is the drought of 2011, which climatologists agree was the worst one-year drought since 1895. A 1954-1956 drought occurred too long ago for many people to remember, but state leaders' actions to fix water problems afteward, such as construction of reservoirs, were responsible for a healthy water supply that allowed the state to grow into an economic and agricultural force. The increasing population that star status attracts is a problem, however, especially when combined with the 2011 drought, which cost $7.62 billion in agriculture losses alone.

"The drought last year—even though we are climbing out of it—the severity of it has a lot of people's attention," Carolyn Brittin of the Texas Water Development Board, said recently. "The economic engine of the state is also paying attention."

The TWDB manages the state's water planning process and offers financial assistance programs to help fund projects. Brittinis its deputy executive administrator.

The economic engine she mentioned includes other states competing for industry by comparing their plentiful water supplies with Texas' diminished reservoirs. "People understand the problem—verification iscoming from other states around the country," said Rep. Doug Miller, R-New Braunfels. The state of Wisconsin, which has water aplenty, airs advertisements showing its brimming lakes side-by-side with Texas' Lake Medina, which is only 13 percent full. "They say, 'Do you want to go to Texas?' It's an economic, competitive factor."

These are the backdrops for the drama that Texas legislators will be starring in come January.

Setting the state legislature's table

Although the issue is as big and diverse as the Lone Star State, water planners on the regional level have offered legislators a course of action. It is called the 2012 State Water Plan, and its introduction is blunt: "In serious drought conditions, Texas does not and will not have enough water to meet the needs of its people, its businesses, and its agricultural enterprises." It then offers conservation and water management strategies necessary to meet needs.

Taken as a whole, the water plan's price tag is a steep $53 billion dollars. Although the cost complicates discussions, the TWDB is making proposals to the legislature that require smaller amounts of financing.

The TWDB was created after the 1954-1956 Texas drought with a mandate to plan for the state's water supply. In 1997, after another drought, Texas changed its method of water planning. The legislature created a bottom-up process, where 16 state groups make decisions about regional water needs. The last three state water plans are products of this process.

However, all planning stops at the plans because the state has balked at the expense and because of the philosophy of some legislators against incurring more debt. Every legislative proposal to finance water projects has failed thus fa. For example, a tap fee that originated in the House years ago, which would have charged home and business owners annual fees for water, never got out of the House, said Rep. Allan Ritter, R-Nederland, chair of the House Natural Resources Committee, speaking at a public water forum hosted by the Texas Tribune, a nonprofit media organization.

Now planners and legislators are pinning their hopes on the 2013 legislative session to tackle some of the $53 billion in projects in the 2012 Water Plan. "Regional entities are asking for about $27 billion in assistance," Brittin said. She stresses that no one is asking for the state to pay for $27 billion in projects. "They are asking for interest subsidies for which the local entities would pay back the whole of the capital and most of the interest."

Projects requiring TWDB help sometimes work this way: A city, county, or river authority unable to absorb the full debt of a project may apply for water project funds through a State Participation Program. This program gives the TWDB temporary ownership interest in the project by assuming most of the debt. TWDB must obtain legislative approval before issuing the bonds. If a project is approved, the entities move ahead and repay the debt on a deferred timetable, and no project has ever defaulted on its state-backed loan. The last funding the legislature appropriated and authorized for State Participation was $225,050,000 in 2010-2011.

A recent big project to use the State Participation Program was a 101-mile pipeline built right after the 1996 drought and opened in 1998. It is called the Mary Rhodes Pipeline and it delivers water from Lake Texana near Edna to Corpus Christi, which is the largest customer for the water. The project brought together the federal and state governments to finance construction. It cost $127 million, and the TWDB still has $47,800,000 loans outstanding to the Lavaca-Navidad River Authority.

One of the projects the Guadalupe-Blanco River Authority is hoping will move onto the legislative table in 2013 is its Mid-Basin Project, which would provide water for a growing population in Hays, Caldwell, Comal, Guadalupe and Kendall counties. The capital cost would be $547 million, but people who use the water would pay off the loan when water supplies go online.

The TWDB has approved a $4.4 million loan for a GBRA feasibility study to identify surface and groundwater supplies and transmission delivery options. That proposal awaits legislative approval before going forward.

Population pressures and funding

The 2012 State Water Plan noted that the population of Texas increased more than 20 percent between 2000 and 2010. That growth was not distributed evenly. For example, although some of the state's 254 counties have less population now than they did in 2000, others have grown more than 80 percent.

Sudden growth is a challenge for any entity that serves the public. Because almost 55 percent of Texans rely on groundwater for drinking, droughts like the last one are a big concern, especially since the drought continues to affect the largest population areas even today. For example, the Edwards Aquifer, which comprises about 95 percent of San Antonio's drinking water, fell to a level at its J-17 well of about 648 feet in mid-November 2012. The long-term average elevation of J-17 is 664 feet.

Although lawmakers have not yet reached consensus on how to pay for water or even what the state's role should be, they did put Proposition 2 before voters in November 2011. Voters approved it, allowing the TWDB to issue additional bonds for water improvements as long as no more than $6 billion are outstanding at any one time.

Legislators need to discuss what the approval of Proposition 2 means for future water projects, said William E. West, Jr., general manager of the GBRA. "They need to talk about how many projects in the plan qualify for Proposition 2. Some legislators believe that only those projects with immediate payback and nothing at risk should be funded." That philosophy poses an equity problem for some parts of the state, he noted. Big cities with dense population can finance projects on their own, while rural areas cannot.

What might happen

Sen. Glenn Hegar, R-Katy, who has been on the Senate Natural Resources Committee for six years, said the drought of 2011 brings a heightened realization of an ever-increasing need for water and water infrastructure. He also noted that legislators do not have to deal with the $53 billion total in the water plan all at once. "But we must get started on funding it," he said.

The question is how to get everyone to agree on a funding mechanism. Both Hegar andMiller mention the state's $8.1 billion rainy day fund, formally known as the Economic Stabilization Fund.

"I believe we have been blessed with an increasing rainy day fund that we would be wise to use for infrastructure funding for water and for transportation," Hegar said. "That's not the sole solution—that is just to begin to get us moving in that direction."

Hegar, who once grew rice on his farm north of Katy, now grows only dryland crops. The farm gives him insight into state water needs that some of his urban colleagues may not have. "We all like to eat, and food has to come from somewhere. It's much better to have a strong and stable food supply within our country than outside of it. And agriculture is a major economic driver for the state.

"Conservation is important too, he noted, adding that battles still exist between urban areas and agricultural regions. A win-lose water plan, where a city wins at the price of a rural area, or vice-versa, makes everyone losers in the end, he adds.

Miller, a four-year member of the House Natural Resources Committee, said he hopes for enough "residual memory" of the 2011 drought to allow for legislation that will develop a funding stream instead of a one-time appropriation. He also sees a connection between water and electricity. "There is a great nexus between those two; in the production of power, you need water. In the end use of electricity, you will be using water. Texans can't do without either, and tying those two together is a logical avenue to research."

If the problem is not fixed, leaders warned that the economic engine of exas will stall. "We know the state has big issues of balancing the budget, and there is health care and education," West said. "But we cannot solve this problem with conservation only or reallocation of agriculture supplies to municipal areas. "The powers that be recognize the need for the state to step up, but what does that mean? What components of the water plan warrant the state's assistance? All special efforts to raise money so far have failed."

Still, he remains optimistic that some projects will be approved. "What that funding is, what is the mechanism, and how many projects, is the focus. We need visionary projects, because all the easy ones have been done. With a legislature that meets only every two years, we need action this session."

©2010-2013 Guadalupe-Blanco River Authority

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