Kyle’s partnership with Alliance Water

As the demand for water in Central Texas increases with a booming population, the City of Kyle has partnered with Alliance Water to plan for and provide long-term water solutions.

Current Updates:

In its mission to provide Kyle and the other partner cities with safe and reliable water, Alliance Water continues to make progress in developing a new water supply to Kyle.

Nearly all of the projects for the Carrizo Water System have started construction. Construction is underway for the Water Treatment Plant, Maxwell Booster Pump Station, the South Inline Elevated

Storage Tank and Pipeline Segments A, B, D and E.  The final design for the Segment C pipeline and North Elevated Storage Tank are expected to be completed Summer of 2023 with construction starting in 2024. 

Check out this video from their Water Treatment Plant Groundbreaking celebration from August 2021! 
 

About Alliance Water

Alliance Water (formerly the Hays Caldwell Public Utility Agency/HCPUA) is a Regional Water Authority formed in January 2007. Its purpose is to resolve the long-term water needs of its sponsor participants including the City of Kyle, Buda, San Marcos, and the Canyon Region Water Authority. This collaboration allows entities to work in tandem to improve the economies of scale on water (or wastewater) projects that would otherwise be cost-prohibitive.

ARWA is a political subdivision of the State of Texas created through the passage of Senate Bill 1198 in the 85th Texas Legislature. A water authority can develop water supplies, transport water, and/or develop wastewater treatment facilities.

Goals of Alliance Water

The mission of Alliance Water is to provide long-term, sustainable water solutions. Working with our partners, Alliance Water strives to be stewards of the environment, provide transparent and responsible operations, and deliver clean, reliable water.

The goals of Alliance Water are to

• Share resources to extend current supplies of partners
• Manage future needs by supplementing the current supplies of Alliance Water Participants with groundwater from the Carrizo-Wilcox aquifer
• Develop a cost-efficient project for drinking water treatment and delivery to all members
• Actively participate with groundwater conservation districts to manage the Carrizo-Wilcox Aquifer
• To be open and transparent with our partners as well as the general public and to be a good member of the communities that we serve

Why does Kyle need more water?

The growth, both residential and commercial, in our city means we must prepare our infrastructure and water supply for future demand. Our current water resources would not be enough to sustain the demand for water into the future.

Becoming part of Alliance Water was a decision that resulted in part from a long-term water supply study in 2005. By teaming up with other cities and entities who also need to secure future water supplies, we’re part of a unique regional approach that would be cost-prohibitive alone.

Since 2006, Alliance Water achieved milestones including leasing about 17,000 acre-feet of water rights in Caldwell and Gonzales Counties. Those leases, which took roughly 2.5 years to negotiate, involved agreements with nearly 80 different landowners. The result was that Alliance Water received a permit from the Gonzales County Underground Water Conservation District in 2012 for the right to produce and transport 10,300 acre-feet per year. 

Due to the cost of the Alliance Water improvements to produce & transport the water, the partners implemented a water-sharing plan for existing water supplies in order to defer construction of the project until water is needed by the aggregate of the partners. The City of Buda entered into an interim agreement with the City of Kyle and also the City of San Marcos through the Alliance Water to provide Buda with up to 1,000,000 gallons per day of water through the existing Guadalupe-Blanco River Authority (GBRA) pipeline. Once the water from Alliance Water comes online in about 2023, that water would revert back to Kyle.

Will this lead to an increase in water rates?

To date, ARWA has issued approximately $36.7 million in debt obligations directly attributed to the City of Kyle’s pro-rata share of capital costs. The City of Kyle was able to absorb that amount of debt without raising rates for water utility system until Fiscal Year 2020.  Below is a summary of planned debt issuance by ARWA for City of Kyle's share of capital costs:

Total Planned Debt Issuance for Kyle's Share of Capital Costs in ARWA Regional Water Supply Project:

• ​$81,960,000.00

​To Date Kyle's Share of Debt Issued By ARWA:

A total of $36,725,000 in long-term debt has been issued by ARWA for the City of Kyle's share of capital costs in the regional water supply contract project as follows:

• $3,530,000.00 issued in 2015
• $8,995,000.00 issued in 2017
• $24,200,000.00 issued in 2019
• $36,725,000.00  Total Debt Issued To Date

Additional Planned Debt Issuance for Kyle's Share By ARWA:

An additional $45,235,000 in long-term debt is planned for issuance by ARWA for the City of Kyle's share of capital costs in the regional water supply contract project as follows:

• $34,530,000.00 issuance planned in October/November 2020
• $10,705,000.00 issuance planned in October/November 2021
• $45,235,000.00  Total Debt Issuance Planned

We estimate an additional $45.2 million in debt obligations will be issued by ARWA between fiscal years 2021 and 2022 to cover capital improvement costs directly attributed to City of Kyle's share of the project to deliver potable drinking water to the residents of Kyle.  The operating budget adopted by Kyle City Council for Fiscal Year 2020-2021 included a 10.0% rate increase for the City's water utility system.

It should be noted that current financial projections indicate an additional 8.0% to 10.0% rate increase in Fiscal Years 2022 and 2023 to cover the debt service on the additional $45.2 million long-term debt (bonds) to be issued for the City's share of capital costs in the regional water supply system (ARWA) and other increases in the annual operations and maintenance costs for the City's water utility system. 

Want to learn more?

Visit the Alliance Water website at www.alliancewater.org to learn more about their efforts to bring safe and reliable water to Central Texas.