Back in 2021, Presidio County was approached by a group of consultants offering to help the county apply for massive funding from the Texas Water Development Board (TWDB). One of those consultants, Water Finance Exchange, strongly encouraged all of the communities within Presidio County to form a county-wide Water Infrastructure Steering Committee in order to compile a list of projects that could then be included in a blanket application for the entire county. Known as “regionalization,” this approach was intended to avoid the wasteful expense of having the city of Marfa, the city of Presidio, the county’s groundwater district, and Presidio County itself pay consultants to separately apply for the available funds. The committee comprised about 35 people from all over the county and met regularly for over a year. The objective was to get the list of projects funded over time through the various programs offered by the TWDB.
In 2022, the TWDB’s Economically Distressed Areas Program (EDAP) was the first such program to pick up several of Presidio County’s projects. EDAP provides funding for first-time water and wastewater service exclusively to residential properties. The projects to be funded with the first round of $12.6 million in promised EDAP funding included the planning, acquisition, design, and construction of a new water system for the colonia of Las Pampas, a new water system for the colonia of Shafter, a new water and wastewater system for the East Heights neighborhood of Marfa, and a new wastewater system to replace a leaking, century-old sewer in the Fort D.A. Russell section of Marfa, which includes Officers Row and the Chinati Foundation. None of the other projects on the steering committee’s list, including the projects requested by the city of Presidio, qualified for EDAP funding because they did not involve first-time water or wastewater service to residential properties.
As negotiations with TWDB wore on in 2023, the agency withdrew $8 million in funding for the construction of the Las Pampas and Shafter systems over concerns about “too many unknowns.” The remaining $4.6 million was dedicated to the planning, design, and acquisition of all four projects (Las Pampas, Shafter, East Heights, and Fort D.A. Russell), and to the construction of the Fort D.A. Russell and East Heights projects. The final EDAP grant/loan package included about $3.3 million in grant funding and a $1.3 million loan. Roughly $3.3 million of the package was allocated to the planning, acquisition, design, and construction of the Marfa projects. The remaining $1.3 million of the package was allocated to the planning, acquisition, and design of the Las Pampas and Shafter projects. The Marfa projects thus received about 72% of the EDAP funding, of which roughly $2,367,000 is grant funding and roughly $924,000 is loan.
The grant/loan application process of the TWDB requires applicants to estimate the costs of a project well before the work begins. Typically, an applicant will hire an engineer to help with these cost projections. But when the county was in the midst of applying for the EDAP funding, the county’s grant writer Bill Moriarty advised against hiring an engineering firm until after the grant/loan had been secured. With nowhere else to turn, the county asked local engineer Ramon Carrasco to estimate the project costs on a pro bono basis. These estimates fell short of actual costs by a significant margin, a fact that did not come to light until after the EDAP loan closed and the county hired Brock & Bustillos, an engineering firm based in El Paso. It is now abundantly clear that there was never enough money in the grant/loan package to construct both Fort D.A. Russell and East Heights.
For about 4 years now, I have been working on behalf of the county to secure an additional $1 million in funding from USDA (originally conceived as an earmark through Congressman Gonzales’ office). This funding coupled with the available construction funds from EDAP total about $2.4 million, which is still not enough to cover construction of Fort D.A. Russell and East Heights. As a result, the only viable option at this time is to select one project and use the available funding to construct it. The city has repeatedly stated that the Fort D.A. Russell project is the priority due to past TCEQ violations.
The county became fully aware of the construction funding shortfall around the time that the TWDB announced a new, one-time grant-only program called the Water Supply and Infrastructure Grant program or WSIG (pronounced “wizig”). The TWDB staffers who have been handling Presidio County’s EDAP projects urged the county to apply for this funding to cover the shortfall. But the eligibility criteria for the grant include a requirement that the applicant submit a financial audit from the most recent fiscal year. Presidio County is currently two years behind on its financial audits.
Unlike cities, where all departments answer to the mayor and city council, counties are composed of offices headed by independently elected officials. This makes it exceedingly difficult to complete audits on time, as there is no central executive with the authority to pressure all departments to put aside their many other tasks and focus on the audit. Presidio County’s auditor is also the only accountant in her office, and one of only two CPAs residing in the county. As a result, she is responsible for a variety of different accounting tasks that no one else can do, in addition to the tasks involved in a financial audit. On top of that, the county switched to a new accounting system this year, which has required months of training, further depleting the time and energy available to complete financial audits.
With the county ineligible for WSIG, I approached the city of Marfa about hiring me to apply to the program on its behalf to secure the funding necessary to construct the water system for East Heights. As I began working on the application in May, it emerged that the city’s eligibility was also unclear because of ownership issues related to the EDAP funding.
In late 2023, as the closing of the EDAP loan drew near, we learned that Texas law requires any applicant to the state’s funding programs to own the facilities where grant/loan funding is to be spent. In an added twist, the TWDB’s loan commitment was set to expire in early 2024, meaning that the county would lose the EDAP funding, rendering two years of effort worthless. Miraculously, the county’s bond counsel, Paul Braden, was able to quickly create an interlocal agreement between the city of Marfa and Presidio County, assigning ownership of the projects to the county for the life of the EDAP loan in order for the county to qualify for the EDAP grant/loan package. The agreement also lays out the interest and principal payments that the city must pay based on the percentage of the EDAP loan that is allocated to the planning, acquisition, design, and construction of the city’s EDAP projects. Under the terms of the executed agreement, ownership of the Fort D.A. Russell project and the East Heights project will revert to the city of Marfa once the city makes its final loan payment to the county in 2044.
As a result of the county’s ownership of the city’s projects under the terms of this interlocal agreement, the TWDB informed the city of Marfa that it was ineligible to apply for WSIG funding to construct the East Heights water system. The only eligible entity is Presidio County. But the lack of a current financial audit rendered the county ineligible for the WSIG program as well.
The same issue also disqualified the county from receiving millions in funding from the TWDB’s State Revolving Funds (SRFs) back in late 2024. The county had been preapproved to receive about $15 million from the SRFs in 2023 to fund nearly all of the remaining projects on the Steering Committee’s original list of projects. These projects would have addressed many of the needs in the county’s unincorporated areas, including its colonias. But in the fall of 2024, the state withdrew the funding at the last minute because the county was unable to produce a current financial audit.
It hasn’t always been like this. Presidio County has a long history of working to provide its unincorporated areas with safe, reliable drinking water. The effort began in earnest in the 1990s, when then County Judge Monroe Elms sought funding for the border colonias of Redford, Ruidosa, and Candelaria. None of those colonias would have been able to secure the funding necessary to drill their own supply wells, build their own water towers and create their own public water supply systems. Upon completion of these water systems with county-mediated funding, each colonia created its own public water supply corporation to independently manage their water systems.
As a general policy, the county would be wise to stop applying for infrastructure grants until it gets current on its financial audits. The county also needs to make sustained investments in the processes and personnel necessary to handle grant funding once it is obtained. Simply going after grants without an overall plan to administer the funding is a waste of time and effort. If the county insists on sticking with this approach, it will continue to get the same results. The current budget cycle offers an opportunity to find the funding necessary to hire another accountant — perhaps a remote consultant in a Texas city — to alleviate some of the county auditor’s ballooning workload so that she can focus on completing the audits. Only then will the county be eligible for infrastructure funding to construct the desperately needed water systems for the colonias of Shafter and Las Pampas.
In the meantime, the county and the city of Marfa need to work together to amend the interlocal agreement. Preliminary discussions have revealed a potential path forward that would involve adding up the costs for the design of the East Heights projects, determining how many principal payments will be required to cover those costs based on the schedule of payments included in the interlocal agreement, and then identifying the date of the principal payment on which the cost for the design of the East Heights projects will be paid in full. County and city officials can then work together with the Texas Water Development Board to craft an amendment to the interlocal agreement to the effect that once the city completes the principal payment on the identified date, ownership of East Heights will revert to the city of Marfa. This will render the city eligible to apply for funding from the Texas Water Development Board for construction of the East Heights projects based on the design already funded by TWDB.
Finally, a word about the gaping need for reform of the state’s water infrastructure funding processes. It took about two years and a lot of scrambling to obtain the EDAP grant/loan package from the TWDB. The planning, acquisition, and design phase for these projects has now taken nearly three years, and the final design is still not completed. We’re not building Rome here. We’re talking about 30 hook-ups in Fort D.A. Russell and 8 hook-ups in East Heights. With any luck, the Fort D.A. Russell project could be completed in another 2-3 years for a total of 8 years needed to get one project constructed out of 5 in the original EDAP application. If we apply this 8-year time window to each of the thousands of pressing water needs throughout Texas, it will literally take centuries before any meaningful headway is achieved.
Presidio County tried to do it right. We assembled a group of experienced consultants, formed an inclusive steering committee, identified regionally beneficial projects, applied for funding multiple times, and still came out with barely anything to show for all that effort. If this can happen to a motivated county like ours, the future looks truly bleak for the majority of rural communities across our state.
The Water Development Board already knows it is failing rural communities based on multiple internal reviews and at least one sunset process. It also gets the message every time an applicant gives up in frustration and tells the board where to shove their money. The TWDB likes to claim that its redundant processes, glacial protocols, and opaque decision-making are intended to protect taxpayer dollars. This is a mirage. If you add up the costs of designing systems that never get built together with the costs of applying for funds that never come through, the resulting waste of taxpayer dollars is staggering.
There is a better way. As I pointed out in a column earlier this year titled “Water Infrastructure Funding Reimagined,” the state could dramatically reduce the administrative burden of applying for funds by creating a streamlined cross-referencing mechanism to automatically prioritize and assign eligible projects to each of the TWDB’s funding programs. This single-application approach could involve a project pipeline where projects are designed as a first step, the resulting design is then used to arrive at the actual construction costs, and these costs are then covered by a grant/loan package that ensures success. The agency might also consider building sustained relationships with its rural clients based on mutual understanding and respect. In sustained partnership with recipient communities, the TWDB could find flexible, tailored ways to safeguard taxpayer dollars while also keeping projects on track to completion.
Without meaningful reform, the state may throw billions at the TWDB, but we will still be here decades from now wondering why so many water issues — from Presidio County’s unserved colonias to Corpus Christi’s water crisis to the upper Guadalupe River’s flood warning system — remain unsolved. Nothing is going to change until the voters of Texas wake up and focus on electing leaders committed to reforming or replacing the TWDB. If the voters and their elected leaders fail to do so, they can’t say they haven’t been warned.
