-Additional contributions to this story from Raul Gonzalez, CU Environmental Management Consultant

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 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. They have to create ways to access water resources for their families. This tight community sometimes relies on bottled water to obtain safe drinking and cleaning water. The word “Colonia” means neighborhood in Spanish, which is what these communities have become.

The area consists of low-income families that have settled into the colonias, where they have cheap plots of land.

Falcon Rural Water SupplyFalcon Rural Water Supply Corporation (WSC) is a small non-profit corporation located about 61 miles northwest of McAllen, Texas, and southeast of Zapata, Texas, in rural western Starr and southeastern Zapata County, along U.S. Highway 83. U.S. Highway 83 parallels the Rio Grande River. Most families reside in Zapata County in colonias, Salineno, Los Arrieros, Falcon Heights, and Colonia, Lopeno, and Chihuahua Ranch. Since Falcon Rural WSC is the nearest water supply corporation, several of these families depend on them for their drinking water.

The Corporation began on September 6, 1966, as a non-profit corporation that provides rural water service to low-income Colonia families and businesses living and operating within Starr and Zapata County.

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 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 linear feet of five and eight-inch water line that has been in service for around 49 years. They will replace it with brand new six and eight-inch water lines. This will allow Falcon Rural WSC to assist the communities better.

KRGV.com states the project will provide safe, treated drinking water with adequate flow pressure to the rural area residents once it is completed.

As mentioned earlier in the story, Falcon Rural WSC is located along U.S. Highway 83.  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. However, this story highlights the benefits of having met this condition in funding. 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 appurtenances 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 appurtenances has reached two million dollars. 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 two million dollars in reserve to fund the project?

The existing water system infrastructure funding came from the United States Department of Agriculture (USDA)-Rural Development. During the subsequent 54 years, the water system has grown to 1,367 water connections. USDA-Rural Development also funded most of the water supply corporations in Starr County. Recently Falcon Rural WSC and others have relied on Communities Unlimited (CU) Community Loan Funding 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 along the border for many years.

The project engineer approached CU to assist in funding the relocation. After researching, CU determined that the corporation might be eligible for funding if the USDA Rural Development could verify that its current Community Loan Fund (CLF) was suitable for takeout from the new project funding.

CU’s Lending Team, Bryn Bagwell, Director of Lending, Kevin Tillman, Lending Loan Associate, and Dan Campos, Project Engineer (PE), got involved.

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 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.

Falcon Water Supply meeting
Communities Unlimited's Raul Gonzalez (far left) works with Falcon Water Supply staff

Communities Unlimited Environmental Management Consultant 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 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 TX DOT 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, Don 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.