Approval of this Resolution will authorize the Alliance Regional Water Authority (ARWA) to work with the Texas Water Development Board (TWDB) to issue $2,175,000 in TWDB State Water Implementation Fund of Texas (SWIFT) bonds to close the remaining financial gap for the ARWA Phase 1C/1D. The total cost for phase 1C/1D is $270,547,670, of which $120,880,000 is already funded through previous SWIFT debt issuances. A funding deficit of $42,837,584 remains of which the City of Buda's share is 5.08% or $2,175,000.

The City of Buda has a regional water supply contract with the Alliance Regional Water Authority (Alliance Water) that allows the Alliance Water to finance, construct, maintain, and operate a water supply project in a manner that will enable the Alliance Water to deliver water to sponsors. The Phase 1C/1D funding includes project shares that were set by the water supply agreement with Buda's share of the total project cost approved at 5.08%. Four debt issuances were initially planned for Buda's share of the funding for the project. The first issuance was in October 2017, the second issuance was in November 2019, the third issuance was in October 2020, and the fourth issuance was in October 2022. Due to rising costs from inflation and easement acquisitions, an additional bond issuance was required to cover the remaining items needed to complete Phase 1B and to cover the expected costs of Phases 1C & 1D. $7,010,000 was issued in October 2024 to cover these additional costs. Additional funds were identified as being needed in late 2024 to cover the cost for a permanent clarification and solids handling solution at the water treatment plant. This sixth issuance (October 21, 2025) totaled $1,700,000 to cover Buda's portion of the needed work. This seventh issuance is the final issuance for Phase 1 of the ARWA project.

The Alliance Water entered into a regional water supply contract with the City on January 15, 2008, to operate a water supply project and deliver water to the City of Buda and other participants. On July 5, 2017, the Alliance Water requested and received approval from the City Council to fund Buda's portion of the pipeline project that will allow for future water to be delivered to the City of Buda and other sponsors. At that meeting, City Council selected the 20-year low interest loan option for this project. City Council was made aware that the Alliance Water would come back to City Council in October of that year for approval to sell the bonds for Phase 1B of the project. City Council subsequently approved a resolution authorizing the sale of bonds for Buda's portion at its October 17, 2017, meeting, not to exceed $1.625 million, which was part of a $31.93 million total issuance. At the October 15, 2019 Council meeting, the City Council approved a resolution authorizing the Board of Directors of the ARWA to issue the City of Buda's portion of contract revenue bonds not to exceed $4.37 million, which was part of a $85.88 million total issuance. At Council's October 20, 2020 meeting, Mr. Moore provided an update on the project and Council approved a resolution authorizing the sale of bonds for Buda's portion not to exceed $6.225 million, which was part of a $122.58 million total issuance. At the October 18, 2022 meeting, City Council approved a resolution authorizing the sale of bonds not to exceed $2,440,000, which was part of a $48,000,000 total issuance. In December 2023, Council approved an Amendment to the Regional Water Supply Contract to allow the use of Bond Anticipation Notes (BAN). The BAN was used to finance the remaining portion of the Phase 1B Project until SWIFT funding could be obtained in 2024. At the October 15, 2024 meeting, City Council approved a resolution authorizing the sale of bonds not to exceed $7,010,000 which was part of a combined $138,000,000 issuance for ARWA. At the October 21, 2025 meeting, City Council approved an additional $1,700,000 for a permanent clarification and solids handling solution at the water treatment plant.

The additional $2,175,000 planned with this SWIFT issuance will be to complete the Phase 1C/1D improvements. These phases expand the water treatment plant and develop new well sites. This will add 413 acre feet per year (368,660 gallons per day) to Buda's water supply. 

City staff has worked with staff at the Alliance Water, McCall Parkhurst & Horton law firm (bond adviser), and staff at Specialized Public Finance (financial adviser) on this request to approve a resolution by the Board of Directors of Alliance Water. This resolution is with respect to the issuance of Buda's final share of SWIFT bonds not to exceed the aggregate principal amount of $2,175,000 n in connection with the Phase 1C/1D Improvements of the Regional Water Supply Project. This is the seventh issuance in bonds for the project. The Board of Directors of Alliance Water is scheduled to consider debt issuance at its October 28th meeting.

FY 2027 Budget includes funding for debt service requirement for Series 2017D, 2019D, 2020D, 2022D, 2024D, 2025D, and 2026 bonds. 

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