Texas Administrative Code › Title 30 - ENVIRONMENTAL QUALITY › Part 1 - TEXAS COMMISSION ON ENVIRONMENTAL QUALITY › Chapter 293 - WATER DISTRICTS › Subchapter E - ISSUANCE OF BONDS › Section 293.44 - Special Considerations

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Developer projects. The following provisions shall apply unless the commission,
				  in its discretion, determines that application to a particular situation
				  renders an inequitable result.
(1) A
				  developer project is a district project that provides water, wastewater,
				  drainage, or recreational facility service for property owned by a developer of
				  property in the district, as defined by Texas Water Code (TWC), §
				  49.052(d).
(2) Except as permitted
				  under paragraph (8) of this subsection, the costs of joint facilities that
				  benefit the district and others should be shared on the basis of benefits
				  received. Generally, the benefits are the design capacities in the joint
				  facilities for each participant. Proposed cost sharing for conveyance
				  facilities should account for both flow and inflow locations.
(3) The cost of clearing and grubbing of
				  district facilities' easements that will also be used for other facilities that
				  are not eligible for district expenditures, such as roads, gas lines, telephone
				  lines, etc., should be shared equally by the district and the developer, except
				  where unusually wide road or street rights-of-way or other unusual
				  circumstances are present, as determined by the commission. The district's
				  share of such costs is further subject to any required developer contribution
				  under §
											293.47
				  of this title (relating to Thirty Percent of District Construction Costs to be
				  Paid by Developer). The applicability of the competitive bidding statutes
				  and/or regulations for clearing and grubbing contracts let and awarded in the
				  developer's name shall not apply when the amount of the estimated district
				  share, including any required developer contribution does not exceed 50% of the
				  total construction contract costs.
(4) A district may finance the cost of
				  spreading and compacting of fill as follows.
(A) A district may finance the cost of
				  spreading and compacting of fill in areas that require the fill for development
				  purposes, such as in abandoned ditches or floodplain areas, only to the extent
				  necessary to dispose of the spoil material (fill) generated by other projects
				  of the district.
(B) A levee
				  improvement district or a district with the powers of a levee improvement
				  district may finance the cost of spreading and compacting fill to remove
				  property from the 100-year floodplain.
(C) A municipal utility district or a
				  district with the powers of a municipal utility district may finance the costs
				  of spreading and compacting fill to provide drainage if the costs are less than
				  the cost of constructing or improving drainage facilities which would have been
				  required to achieve a similar purpose as the fill project, as determined by the
				  district's engineer.
(5)
				  The cost of any clearing and grubbing in areas where fill is to be placed
				  should not be paid by the district, unless the district can demonstrate a net
				  savings in the costs of disposal of excavated materials when compared to the
				  estimated costs of disposal off site.
(6) When a developer changes the plan of
				  development requiring the abandonment or relocation of existing facilities, the
				  district may pay the cost of either the abandoned facilities or the cost of
				  replacement facilities, but not both.
(7) When a developer changes the plan of
				  development requiring the redesign of facilities that have been designed, but
				  not constructed, the district may pay the cost of the original design or the
				  cost of the redesign, but not both.
(8) A district shall not finance the pro rata
				  share of oversized water, wastewater, or drainage facilities to serve areas
				  outside the district unless:
(A) such
				  oversizing:
(i) is required by or represents
				  the minimum approvable design sizes prescribed by local governments or other
				  regulatory agencies for such applications;
(ii) does not benefit out-of-district land
				  owned by the developer;
(iii) does
				  not benefit out-of-district land currently being developed by others;
				  and
(iv) the district agrees to use
				  its best efforts to recover such costs if a future user outside the district
				  desires to use such capacity; or
(B) the district has entered into an
				  agreement with the party being served by such oversized capacity that provides
				  adequate payment to the district to pay the cost of financing, operating, and
				  maintaining such oversized capacity; or
(C) the district has entered into an
				  agreement with the party to be served or benefitted in the future by such
				  oversized capacity, which provides for contemporaneous payment by such future
				  user of the incremental increase in construction and engineering costs
				  attributable to such oversizing and which, until the costs of financing,
				  construction, operation, and maintenance of such oversized facilities are
				  prorated according to paragraph (2) of this subsection, provides that:
(i) the capacity or usage rights of such
				  future user shall be restricted to the design flow or capacity of such
				  oversized facilities multiplied by the fractional engineering and construction
				  costs contemporaneously paid by such future user; and
(ii) such future user shall pay directly
				  allocable operation and maintenance costs proportionate to such restricted
				  capacity or usage rights; or
(D) the district or a developer in the
				  district has entered into an agreement with a municipality or regional water or
				  wastewater provider regarding the oversized facilities and such oversizing is
				  more cost-effective than alternative facilities to serve the district only. For
				  the purposes of this subparagraph, regional water or wastewater provider means
				  a provider that serves land in more than one county. An applicant requesting
				  approval under this subparagraph must provide:
(i) bid documents or an engineer's sealed
				  estimate of probable costs of alternatives that meet minimum acceptable
				  standards based on costs prevailing at the time the facilities were
				  constructed; or
(ii) an engineering
				  feasibility analysis outlining the service alternatives considered at the time
				  the decision to participate in the oversizing was made; or
(iii) any other information requested by the
				  executive director.
(9) Railroad, pipeline, or underground
				  utility relocations that are needed because of road crossings should not be
				  financed by the district; however, if such relocations result from a
				  simultaneous district project and road crossing project, then such relocation
				  costs should be shared equally. The district's share of such costs is further
				  subject to any required developer contribution under §
											293.47
				  of this title.
(10) Engineering
				  studies, such as topographic surveys, soil studies, fault studies, boundary
				  surveys, etc., that contain information that will be used both for district
				  purposes and for other purposes, such as roadway design, foundation design,
				  land purchases, etc., should be shared equally by the district and the
				  developer, unless unusual circumstances are present as determined by the
				  commission. The district's share of such costs is further subject to any
				  required developer contribution under §
											293.47
				  of this title.
(11) Land planning,
				  zoning, and development planning costs should not be paid by the district,
				  except for conceptual land-use plans required to be filed with a city as a
				  condition for city consent to creation of the district.
(12) The cost of constructing lakes or other
				  facilities that are part of the developer's amenities package should not
				  typically be paid by the district; however, the costs for the portion of an
				  amenity lake considered a recreational facility under paragraph (24) of this
				  subsection may be funded by the district. The cost of combined lake and
				  detention facilities should be shared with the developer on the basis of the
				  volume attributable to each use, and land costs should be shared on the same
				  basis, unless the district can demonstrate a net savings in the cost of
				  securing fill and construction materials from such lake or detention
				  facilities, when compared to the costs of securing such fill or construction
				  materials off site for another eligible project. Pursuant to the provisions of
				  TWC, §49.4641, as amended, a district is not required to prorate the costs
				  of a combined lake and detention site between the primary drainage purpose and
				  any secondary recreational facilities purpose if a licensed professional
				  engineer certifies that the site is reasonably sized for the primary drainage
				  purpose.
(13) Bridge and culvert
				  crossings shall be financed in accordance with the following provisions.
(A) The costs of bridge and culvert crossings
				  needed to accommodate the development's road system shall not be financed by a
				  district, unless such crossing consists of one or more culverts with a combined
				  cross-sectional area of not more than nine square feet. The district's share
				  shall be subject to the developer's 30% contribution as may be required by
				  §
												293.47
				  of this title.
(B) Districts may
				  fund the costs of bridge and culvert crossings needed to accommodate the
				  development's road system that are larger than those specified in subparagraph
				  (A) of this paragraph, which cross channels other than natural waterways with
				  defined bed and banks and are necessary as a result of required channel
				  improvements subject to the following limitations:
(i) the drainage channel construction or
				  renovation must benefit property within the district's boundaries;
(ii) the costs shall not exceed a pro rata
				  share based on the percent of total drainage area of the channel crossed,
				  measured at the point of crossing, calculated by taking the total cost of such
				  bridge or culvert crossing multiplied by a fraction, the numerator of which is
				  the total drainage area located within the district upstream of the crossing,
				  and the denominator of which is the total drainage area upstream of the
				  crossing; and
(iii) the district
				  shall be responsible for not more than 50% of the pro rata share as calculated
				  under this subsection, subject to the developer's 30% contribution as may be
				  required by §
													293.47
				  of this title.
(C) The
				  cost of replacement of existing bridges and culverts not constructed or
				  installed by the developer, or the cost of new bridges and culverts across
				  existing roads not financed or constructed by the developer, may be financed by
				  the district, except that any costs of increasing the traffic-carrying capacity
				  of bridges or culverts shall not be financed by the district.
(14) In evaluating district
				  construction projects, including those described in paragraphs (1) - (12) of
				  this subsection, primary consideration shall be given to engineering
				  feasibility and whether the project has been designed in accordance with good
				  engineering practices, regardless of other acceptable or less costly
				  engineering alternatives that may exist.
(15) Bond issue proceeds will not be used to
				  pay or reimburse consultant fees for the following:
(A) special or investigative reports for
				  projects which, for any reason, have not been constructed and, in all
				  probability, will not be constructed;
(B) fees for bond issue reports for bond
				  issues consisting primarily of developer reimbursables and approved by the
				  commission but which are no longer proposed to be issued;
(C) fees for completed projects which are not
				  and will not be of benefit to the district; or
(D) provided, however, that the limitations
				  shall not apply to regional projects or special or investigative reports
				  necessary to properly evaluate the feasibility of alternative district
				  projects.
(16) Bond funds
				  may be used to finance costs and expenses necessarily incurred in the creation
				  and organization of the district and the operation of the district as follows.
(A) Creation and organization expenses were
				  incurred or projected to incur during the creation and organization period.
				  Operational expenses were incurred or projected to incur during construction
				  periods which include periods during which the district is constructing its
				  facilities or there is construction by third parties of aboveground
				  improvements within the district.
(B) Creation and organization expenses are
				  expenses incurred through the date of the canvassing of the confirmation
				  election.
(C) Construction periods
				  do not need to be continuous; however, once reimbursement for a specific time
				  period has occurred, operational expenses for a prior time period are no longer
				  eligible. Payment of operational expenses during construction periods is
				  limited to five years in any single bond issue.
(D) Any reimbursement to a developer of
				  operational expenses with bond funds is restricted to actual operational
				  expenses paid by the district during the same five-year period for which
				  application is made in accordance with this subsection.
(E) The district may pay interest on the
				  expenses under this paragraph. Section
				  293.50
				  of this title (relating to Developer Interest Reimbursement) applies to
				  interest payments for a developer and such payments are subject to a developer
				  reimbursement audit.
(17) In instances where creation costs to be
				  paid from bond proceeds are determined to be excessive, the executive director
				  may request that the developer submit invoices and cancelled checks to
				  determine whether such creation costs were reasonable, customary, and necessary
				  for district creation purposes. Such creation costs shall not include planning,
				  platting, zoning, other costs prohibited by paragraphs (10) and (14) of this
				  subsection, and other matters not directly related to the district's water,
				  wastewater, and drainage system, even if required for city consent.
(18) The district shall not purchase, pay
				  for, or reimburse the cost of facilities, either completed or incomplete, from
				  which it has not and will not receive benefit, even though such facilities may
				  have been at one time required by a city or other entity having
				  jurisdiction.
(19) The district
				  shall not enter into any binding contracts with a developer that compel the
				  district to become liable for costs above those approved by the
				  commission.
(20) A district shall
				  not purchase more water supply or wastewater treatment capacity than is needed
				  to meet the foreseeable capacity demands of the district, except in
				  circumstances where:
(A) lease payments or
				  capital contributions are required to be made to entities owning or
				  constructing regional water supply or wastewater treatment facilities to serve
				  the district and others;
(B) such
				  purchases or leases are necessary to meet minimum regulatory standards;
				  or
(C) such purchases or leases are
				  justified by considerations of economic or engineering feasibility.
(21) The district may finance
				  those costs, including mitigation, associated with flood plain regulation and
				  wetlands regulation, attributable to the development of water plants,
				  wastewater treatment plants, pump and lift stations, detention/retention
				  facilities, drainage channels, and levees. The district's share shall not be
				  subject to the developer's 30% contribution as may be required by §
											293.47
				  of this title.
(22) The district
				  may finance those costs associated with endangered species permits. Such costs
				  shall be shared between the district and the developer with the district's
				  share not to exceed 70% of the total costs, unless unusual circumstances are
				  present as determined by the commission. The district's share shall not be
				  subject to the developer's 30% contribution under §
											293.47
				  of this title. For purposes of this paragraph, "endangered species permit"
				  means a permit or other authorization issued under §7 or §10(a) of
				  the federal Endangered Species Act of 1973,
				  16 United States Code, §
												1536 and §
											1539(a).
(23) The district may finance 100% of those
				  costs associated with federal storm water permits. The district's share shall
				  be subject to the developer's 30% contribution as may be required by §
											293.47
				  of this title. For purposes of this paragraph, "federal storm water permit"
				  means a permit for storm water discharges issued under the federal Clean Water
				  Act, including National Pollutant Discharge Elimination System permits issued
				  by the United States Environmental Protection Agency and Texas Pollutant
				  Discharge Elimination System permits issued by the commission.
(24) The district may finance the portion of
				  an amenity lake project that is considered a recreational facility.
(A) The portion considered a recreational
				  facility must be accessible to all persons within the district and is
				  determined as:
(i) the percentage of shoreline
				  with at least a 30-foot wide buffer between the shoreline and private property;
				  or
(ii) the percentage of the
				  perimeter of a high bank of a combination detention facility and lake with at
				  least a 30-foot wide buffer between the high bank and private
				  property.
(B) The
				  district's share of costs for the portion of an amenity lake project that is
				  considered a recreational facility is not subject to the developer's 30%
				  contribution under §
												293.47
				  of this title.
(C) The authority
				  for districts to fund recreational amenity lake costs in accordance with this
				  paragraph does not apply retroactively to projects included in bond issues
				  submitted to the commission prior to the effective date of this
				  paragraph.