Regional Water System
title
Texas Water Development Board (TWDB) Financing Agreement for the Bois d’Arc Lake / Leonard Water Treatment Plant - Phase III; Resolution No. 26-29
end
SUBJECT
recommendation
Adopt Resolution No. 26-29 authorizing the execution of a Financing Agreement with the TWDB for financing the Bois d’Arc Lake (BDL) / Leonard Water Treatment Plant (LWTP), which consists of the Leonard Treated Water Pipeline No. 2 (LTWPL No. 2) project in the Regional Water System (RWS).
end
PURPOSE
This bond issue finances various components of the BDL / LWTP Phase III - Leonard Treated Water Pipeline No. 2 project. The Financing Agreement with the TWDB includes financing with lower than market financing costs.
RECOMMENDATION
The Executive Director, NTMWD staff, McCall, Parkhurst and Horton, LLP, NTMWD Bond Counsel, and Hilltop Securities, Inc., NTMWD Financial Advisor, recommend the Board of Directors adopt Resolution No. 26-29, “A Resolution Authorizing a Financing Agreement with the Texas Water Development Board”.
|
Consultant: |
N/A |
|
|
|
|
Scope: |
N/A |
|
|
|
|
Project: |
BDL/LWTP Phase III - Leonard Treated Water Pipeline No. 2 |
|
|
|
|
Amount: |
N/A |
|
|
|
|
Committee: |
This item was reviewed with the Finance Committee on April 08, 2026. |
DRIVER(S) FOR THIS PROJECT
|
Strategic Objective: |
2.3 Rigorous Financial Management |
|
☐ Regulatory Compliance |
☐ Asset Condition |
|
☐ Capacity |
☐ Redundancy/Resiliency |
|
☐ Relocation or External Requests |
☐ Operational Efficiency |
|
☐ Safety |
☒ Administrative |
|
☐ Policy |
☐ Other _____________ |
BACKGROUND
• On January 29, 2026, NTMWD submitted an abridged application to the TWDB for financial assistance from TWDB’s SWIFT Program to fund $379.020M in costs for the BDL/LWTP Phase III LTWPL No. 2 project.
• On April 17, 2026, the TWDB formally invited NTMWD to submit an application.
• On April 23, 2026, the NTMWD Board authorized filing the application for financial assistance. (CAI 26C-14 & Res. 26-11)
• On May 18, 2025, NTMWD submitted a final application to TWDB for financial assistance from TWDB’s SWIFT program to fund $370.770M in costs for the BDL/LWTP Phase III Leonard Treated Water Pipeline No. 2 (LTWPL No. 2) project.
• On May 19, 2026, the TWDB notified NTMWD that the financial application submitted is considered to be administratively complete.
• On July 23, 2026, the TWDB authorized the commitment for financial assistance in the amount of $370.770M (TWDB Resolution No. 26-083).
• NTMWD anticipates that on August 27, 2026, a Resolution authorizing the option for NTMWD to reimburse itself with bond proceeds for cash financed expenditures incurred 60 days prior to the bond issue, and all future expenditures, in an amount not-to-exceed $354.475M will be authorized by NTMWD’s Board.
• In order for NTWMD to access the SWIFT Program funds, a Financing Agreement must be entered into with the TWDB.
• Adoption of the Bond Resolution will be considered by the NTMWD Board at the October 22, 2026 meeting.
• TWDB is to loan up to $370.770M to NTMWD from the SWIFT program with proceeds anticipated to be delivered on or around November 19, 2026.
• TWDB may terminate the Financing Agreement in the event of failure to issue their bonds.
• NTMWD’s ED/GM or CFO may terminate the Financing Agreement:
o In writing between 13 days and 6 days prior to initiation of the pricing of TWDB Bonds but be required to pay transaction costs (ratings agency fees, financial advisor fees, legal fees etc.) in an amount not to exceed $447,135 and;
o In writing within 5 days prior to initiation of the pricing of TWDB Bonds but be required to pay transaction costs in a total penalty amount of $4.155M.
• Financial assistance under the SWIFT program provides up to a 14% interest rate subsidy for 30-year bonds.
• NTMWD is exempt from the U.S. Iron and Steel provisions for all BDL/LWTP Phase I, II, and III projects per the letter from TWDB dated 11/14/2025.
• Annual debt service savings for the SWIFT program funded project have been estimated to be $26.340M.
• TWDB SWIFT interest rate is estimated at 4.03%; however, the actual interest rate will be determined at pricing of the TWDB’s bonds, expected to be late September.
FUNDING
Representatives from McCall, Parkhurst and Horton, LLP and Hilltop Securities, Inc., will be available at the Board Meeting to provide additional information on the application and funding process.