The city of Willow Park discussed wastewater treatment plant options Tuesday night and the city council approved a financial assistance resolution for funding that can be put towards a possibility in a 3-1 vote.
The funding will come through the Texas Water Development Board and the city is requesting about $17 million. The Texas Commission on Environmental Quality requires a city to start implementing a solution once a certain threshold is hit in a wastewater treatment plant. WP is expected to cross that threshold in 2023 and exceed capacity of the plant in 2025.
The options the city looked at were wholesale contracts with Weatherford, Aledo or Fort Worth, or constructing its own permanent treatment plant.
WP resident Marcy Galle spoke out against the city building its own plant.
“I have been outspoken on the issue of the Willow Park sewer plant since 2015. Since that time I have supported a wholesale sewer treatment contract with Fort Worth. Willow Park does not need to be in the sewer plant business. On March 10, [City Engineer] Derek Turner briefed council on capital improvements, options were given — build a new plant or a wholesale contract. Costs were provided from $11 million to $17 million. The council then went into closed session to discuss real property, but took no action. Let me say that again, council took no action,” Galle said. “So how exactly do we find ourselves in a position [Tuesday] evening with a council memo explaining a location to be determined? Who decided that the Fort Worth wholesale contract option was out of the picture? Did staff decide this on their own without approval from the council? Because that’s what it sounds like happened.
“On the financial side, I have concerns because the debt schedule on $17 million shows a 64% increase in sewer revenues that would be passed along to the customers in just three years. I urge the council to table this item, I urge the council to have a public meeting about the sewer plant issue and go from there. Willow Park does not need to be in the sewer plant business.”
WP City Manager Bryan Grimes said back at the March city council meeting, a lengthy discussion was held about the wholesale contract possibilities and said the city has also looked at several sites for potential construction of its own treatment plant.
“Just to be clear on the timeline, on March 10 we announced that we were going to apply for these funds. This is not an issuance of debt, this is not an official notice of intent to issue debt, this is simply a resolution to apply for the funds,” Grimes said. “If you decide you want to do a wholesale contract, you can do that. This is going to be a lengthy process much like the Fort Worth water project. At several points along the way, you can stop the process.”
WP City Engineer Derek Turner discussed the options and costs associated with them.
“We’ve looked at options for building a new plant and then a wholesale contract with another local entity that’s in the treatment business and essentially three options there — Fort Worth, Weatherford and Aledo. Aledo has not offered a contract. They are looking at an expansion of their existing plant and they’ve shared numbers with us so we’re able to predict some costs if there was an opportunity there,” Turner said. “All three of these [options] would involve some kind of infrastructure capacity buy-in. In addition to that, getting the water from Willow Park to wherever that location is, you’d have the transmission cost associated with that.”
Turner said the estimated total cost for a contract with Aledo would be approximately $17.5 million — $10 million for the buy-in, $7.5 million for the transmission.
Turner said Weatherford is not opposed to a contract and had its engineer perform a study to determine what the cost would look like if they were to negotiate a contract.
“The buy-in portion is broken into two parts. The first part was an immediate impact that serving Willow Park would have on their system and their infrastructure and that cost was $9.72 million. They also broke out a separate number based on a 10-year projection of the impact that [WP] would have as demands increase and that number was $9.25 million. So the buy-in for Willow Park to negotiate with Weatherford would start at $19.1 million,” Turner said. “There’s potentially other fees that would be on top of that.”
The transmission cost for Weatherford would be $6.5 million for a total of approximately $25.47 million for a contract with Weatherford.
A contract with Fort Worth would be a total of about $20 million — $10 million buy-in and $10 million for transmission.
“They were willing to discuss it and once they found out what the capacity that [Willow Park] would need was, they backed off pretty quickly. At this point I think it would be fair to describe it as they’re hesitant to even negotiate,” Turner said.
Grimes added, “We would take up 10% of their capacity initially and I think that gave their staff a lot of pause.”
Turner said for the city to build its own wastewater treatment plant would cost about $14.2 million.
“There’s going to be transmission costs associated with a new plant and the transmission cost estimate that we’ve done is $3.2 million. The actual cost of the plant is $11 million so the total cost for construction of that project for the capital improvement cost would be $14.2 million,” Turner said. “Currently, the recommended option would be the new permanent plant. That would be considered to have a 30-year lifespan.”
Eric Maha with HilltopSecurities said once the funding application is submitted, it will take about three or four months for the Texas Water Development Board to come back to the city with a funding commitment.
“Once you have that funding commitment, then you go through the traditional debt issuance process. You’ve seen the number of $17 million and that’s actually $14 million for new projects and then about $2.93 million would be to refinance some 2017 debt,” Maha said. “We assume the actual rates and the funding would occur in early 2021, so there is some time between now and 2021 when interest rates could fluctuate but based on the rates today, we’re projecting about 0.2%.”
WP Place 2 Councilmember Amy Fennell said she thinks the information has come to the council too late.
“Why are we limiting ourselves to the $17 million because that leads me to believe that the decision has already been made. I think this information has come to us too last minute. It’s a rush deal,” Fennell said. “I knew what the estimate was for the Weatherford contract, but I didn’t know what Fort Worth was — we never discussed the price of it. We’re limiting ourselves here. These numbers have been thrown at me quickly. I did not get this information in enough time to make an appropriate decision on this.”
WP Place 4 Councilmember Lea Young said in March the discussion was that the funding request would be between $11 million and $17 million.
“We stated in March that it would be between $11 million and $17 million for what we would apply for to take care of wastewater needs. My understanding is that we’re applying for starting the process for funding that can go towards any wastewater treatment option,” Young said. “What I just heard [Maha] say was that we have three to four months before there’s a funding commitment that we will have to act on.”
Turner said if the funding amount does need to be increased at a later date, a resolution could come before the council to take action on. He added that an engineering study will take place during the three to four months and it will require the city look at all of the options in detail, which will be presented back to the council.
The financial assistance resolution was approved, with Fennell voting against.