Finding Solutions In Rural Texas

Communities Unlimited (CU) works with communities in seven states in the southern United States to overcome poverty and achieve sustainable prosperity. Among the organization’s areas of focus is environmental services—addressing rural communities’ water and wastewater needs. Two case studies and an event in rural Texas illustrate the challenges and progress.

City of Ingram
The City of Ingram, Texas, is located in Kerr County on the banks of the Guadalupe River, northwest of San Antonio. Founded in 1879 by J.C.W. Ingram, the city is home to Lion’s Park, which holds a full-size replica of Stonehenge. The park borders Lake Old Ingram, which the Guadalupe River feeds. The river and lake border a colonia, where several homes are located. Colonias are small, rural, and often unincorporated communities along the U.S.–Mexico border where access to services, including water and wastewater, is often limited.

For years the homes in this area used decentralized wastewater systems, more specifically septic systems, instead of a centralized wastewater system, and many of the septic tanks began to age and leak. The aging septic tanks leaked untreated sewage that ran into the water table and the river, causing an environmental and health hazard.

The City of Ingram was aware of this problem as well as the large amount of work required to connect the homes and businesses in the area, including the colonia, to a centralized wastewater system. In 2002, the city received a grant from the United States Department of Agriculture (USDA), but this grant was just the beginning of a very long and complicated process. The City of Ingram spent more than a decade researching to find additional funding and support for this much-needed infrastructure project.

The previous mayor of Ingram, James Salter, said, “it has been a long journey to get here, and there’s going to be more to come.” In addition to the mountains of paperwork the city secretary had to contend with, they also faced backlash from local business owners who were irritated they had to pay to hook up to wastewater collection lines. Some citizens even petitioned to dissolve the local government over fears of city debt. The former mayor worked through the myriad processes and was passionate about finding funding to see this through.

Decommissioning septic systems has historically worked to improve water quality in other towns, so officials believed the outcome would improve the local economy by drawing new businesses in and cleaning up the river for locals and tourists alike. All of this would make the city a place where people would want to live and travelers would want to visit. As such, in April 2022, the Ingram City Council formally accepted almost $4.7 million in grant and loan funds to finish the multi-phase wastewater project.

Ongoing testing showed that the Guadalupe River was becoming cleaner than it had been in a long time, and Salter continued his campaign to have the city “hang in there” for a few years and see this project through to completion. Due to this effort, he was able to show residents that they were on the right course after they connected more than 500 people.

During a city council meeting, council members agreed to issue $947,000 in bonds and receive a $3.74 million grant from the USDA under the federal colonia program. According to Ingram City Manager Mark Bosma, the funds will be used to finance the design, engineering, and construction of wastewater infrastructure to connect approximately 125 homes to Kerrville’s wastewater system as Phase III of this project. The City of Ingram currently has an agreement with the City of Kerrville to purchase sewage treatment services from Kerrville.

Also in Phase III, the City of Ingram will incorporate areas to its northwest, including Winona Street to the North, Josephine Street to the East, Moore Street to the West, and State Highway Number 27 to the south. In addition to the sewer collection lines that will be installed, an additional lift station must be added to the system to tie Phase III into the wastewater collection system.

Lake Medina
CU staff learned through participating in the Texas Water Infrastructure Coordination Committee (TWICC) about the Medina Highlands Water System’s need for funding. Located in Bandera County. Medina Highlands needs to replace its original well, which has severely declined in production over the hot summer months. The well no longer meets Texas Commission of Environmental Quality (TCEQ) requirements for water capacity.

Following the referral through TWICC, CU staff assisted with a CU loan application—CU is a Community Development Financial Institution, or CDFI—but later learned that the loan was declined due to the uncertainty of the utility, because it only had 45 connections. Medina Highlands needed to submit a rate application to the Public Utility Commission (PUC) before it could raise water rates in order to complete the required infrastructure upgrades, and it did so with the help of a consultant. In March 2021, CU staff assisted system owner John Moore, in coordination with an engineer and geologist, in submitting a Project Information Form (PIF), or initial application, to the Texas Water Development Board (TWDB). The application was for a possible Drinking Water State Revolving Fund (DWSRF) loan to fund the construction of a new well that could meet water capacity needs. The need was only growing: Just the previous month, in February 2021, Winter Storm Uri caused a big freeze across the state of Texas, and Medina Highlands, like many systems across the state, experienced broken infrastructure and loss of water service and required repairs.

In response to the March 2021 PIF, Medina Highlands received the formal invitation to apply for DWSRF funds and was ranked No. 32 in the State Fiscal Year 2023 DWSRF intended use plan (IUP) for Texas. CU assisted with compiling some of the information needed for the application while, at the same time, engineers completed the project budget, descriptions, and the Peak Expiratory Flow Rate (PEFR). CU also organized and facilitated a meeting for Medina Highlands with Texas PUC staff to review the separate Sale, Transfer or Merger (STM) application and the current rate application. They wanted to ensure that both review teams were aware of the simultaneous funding application to the TWDB to have an adequate water supply for community residents.
Medina Highlands may be in the second or third round of invitation for SRF funding, either as a loan or with the partial inclusion of small system grant funds. However, the process is slow, and the system continued to experience water outages. CU inquired with DWSRF staff about the possibility of a CU interim loan to help the well completion happen faster. However, TWDB considers interim financing IOUs not eligible for “refinancing,” so this option is not currently a possibility. CU will continue to work with the community and funders to find a workable solution so the health and safety of community members can be maintained.

Texas Infrastructure Funding Event
On April 14, 2022, the Rural Community Assistance Partnership (RCAP) and CU joined forces to host the Texas Infrastructure Funding Event, thanks to the generous support of the Cynthia and George Mitchell Foundation. USDA presented and provided information on affordable financial assistance to rural areas and towns to develop water supply, sewage, stormwater, and solid waste disposal. TWDB provided information on available financial services, including DWSRF, the Clean Water State Revolving Fund (CWSRF), Texas Water Development Fund (Dfund), and the State Water Implementation Fund for Texas (SWIFT). TDA presented information on Texas CDBG Programs. These programs included presentations addressing infrastructure, Community Development (CD), Colonia Fund Construction (CFC), Downtown Revitalization & Main Street (DRP), and State Urgent Need (SUN). Other programs mentioned included Planning & Capacity Building (PCB) and Fire, Ambulance and Service Truck (FAST). NADBank shared information on their programs and services, including lending, grants, and technical assistance. Types of projects include water and sewage; residential, industrial, and hazardous waste; air quality; clean and renewable energy; and energy efficiency.

Nearly 100 people registered for the event, and several connections were established between funders and small and rural communities in need of funding. For example, Joe Craig from Grassland Water Supply Corporation (WSC) attended the workshop. Grassland WSC has since turned in a Project Information Form (PIF) to the TWDB for a reverse osmosis treatment plant. Surveys from the event showed favorable feedback, and CU and RCAP hope to host events like this in the future and have plans to host similar events, hopefully in person, in Texas in 2023.