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Featured, from left: Several members of the Hive Effect in Edinburg: Juan F. Rodríguez, Mako Media; Michelle Vallejo, Common Culture, RGV; Harvey Rodríguez, Jr., Vice President, Board of Directors, Edinburg Economic Development Corporation; Eduardo Robles, Web & Tech Consulting; and Rubén Morales, Surface Web Development, pose for an image taken at Grindstone Coworking, located at 506 W. University Drive, on Tuesday, September 23, 2016. According to its website, http://hiveeffect.com/intro/, Hive Effect is an entrepreneur development initiative developed as a partnership between the Edinburg Economic Development Corporation and Grindstone Coworking. Hive Effect, in turn, partners with local and regional entrepreneurial organizations and businesses with programs and events that aim to grow the entrepreneurial ecosystem across the Rio Grande Valley. The Edinburg EDC serves local companies by providing assistance with expansion plans, programs to help retain business, and advocating for policies that enhance the region’s economic competitiveness.

Photograph By DANIEL RIVERA

A recent decision by the Texas Water Development Board to approve a $5.4 million loan for Edinburg’s water treatment services also provides additional independent and positive light on the strength of the city’s economy, and the integrity of its city government, according to the Edinburg Economic Development Corporation. The Edinburg EDC, whose Executive Director is Agustín García, Jr., is the jobs-creation arm of the Edinburg Mayor and Edinburg City Council. The Edinburg EDC Board of Directors is comprised of Mayor Richard García as President, Harvey Rodríguez, Jr. as Vice President, Elías Longoria, Jr., as Secretary/Treasurer, and Richard Ruppert and Dr. Peter Dabrowski as Members. According to the required analysis by that state agency, “the financial sustainability indicators for the city are strong. The city shows that it has the ability to repay its debt. The city scored well on other indicators showing the overall health of the city.” Sen. Juan “Chuy” Hinojosa, D-McAllen, who on Tuesday, November 8, 2016, was reelected to a new four-year term, reflected on how the action by the Texas Water Development Board is further evidence of the vitality of Edinburg as a place in which to invest, work and live. “I applaud Mayor Richard García and the Edinburg City Council for working together with the State to invest in infrastructure for the city’s future growth and provide safe drinking water to the citizens of Edinburg,” said Hinojosa. “Clean water and wastewater services are essential to the development and health of our communities. The impact of this infrastructure improvement will promote economic development and safeguard against public health concerns.”

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Financial review by Texas Water Development Board provides independent, positive light on the strength of Edinburg’s economy, city government

By DAVID A. DÍAZ
Legislativemedia@aol.com

A recent decision by the Texas Water Development Board to approve a $5.4 million loan for Edinburg’s water treatment services also provides additional independent and positive light on the strength of the city’s economy, and the integrity of its city government, according to the Edinburg Economic Development Corporation.

The Edinburg EDC, whose Executive Director is Agustín García, Jr., is the jobs-creation arm of the Edinburg Mayor and Edinburg City Council.

The Edinburg EDC Board of Directors is comprised of Mayor Richard García as President, Harvey Rodríguez, Jr. as Vice President, Elías Longoria, Jr., as Secretary/Treasurer, and Richard Ruppert and Dr. Peter Dabrowski as Members.

According to the required analysis by that state agency, “the financial sustainability indicators for the city are strong. The city shows that it has the ability to repay its debt. The city scored well on other indicators showing the overall health of the city.”

The funding, authorized on Thursday, September 22, 2016, came following a request by the City of Edinburg for a $5,405,000 loan from the Drinking Water State Revolving Fund to finance the planning, design, and construction of improvements to and expansion of the West Water Treatment Plant, which is located at 1752 S. Mon Mack Road.

Sen. Juan “Chuy” Hinojosa, D-McAllen, who on Tuesday, November 8, 2016, was reelected to a new four-year term, reflected on how the action by the Texas Water Development Board is further evidence of the vitality of Edinburg as a place in which to invest, work and live.

“I applaud Mayor Richard García and the Edinburg City Council for working together with the State to invest in infrastructure for the city’s future growth and provide safe drinking water to the citizens of Edinburg,” said Hinojosa. “Clean water and wastewater services are essential to the development and health of our communities. The impact of this infrastructure improvement will promote economic development and safeguard against public health concerns.”

The Edinburg EDC extensively uses such independent findings about the city’s socioeconomic advances to recruit new businesses and help existing companies remain and expand.

For example:

• According to the Texas Workforce Commission, as of October 2016, which is the latest figure available, more than 800 jobs have been created in Edinburg compared to the same month last year. In addition, the Texas Workforce Commission found that Edinburg’s unemployment rate for October 2016 was 4.7 percent, which is better than the U.S. unemployment rate of 4.9 percent for the same month;

• The Texas Comptroller of Public Accounts, in its latest data, noted that Edinburg continues to lead major Valley economies with 4.54 percent growth rate from January through September 2016, compared with the same period last year, while statewide, all cities combined showed only a 0.9 percent increase; and

• Most recently, the Edinburg city government, through its Code Enforcement Department, released the latest construction activities report, which showed total construction in Edinburg, not including value of building activities at UTRGV-Edinburg, approached $189 million between January and October 2016, compared with almost $115 million during the same 10 months last year.

INDEPENDENT VIEW OF EDINBURG ECONOMY, CITY GOVERNMENT’S FINANCIAL PRACTICES

According to the executive summary by the Texas Water Development Board of the loan application by the city:

The city is pledging a junior lien on the net revenues of the waterworks and sewer system for the repayment of the proposed loan. Based on staff’s analysis of financial documentation received, current revenues are sufficient to meet the proposed debt service requirements.

Cost Savings

Based on a 20-year maturity and current interest rates, the city could save approximately $680,058 over the life of the loan.

Internal Risk Score

Staff assigns a 2A to the city and the proposed project to be funded by the Texas Water Development Board. This means that the city’s payment capacity is strong.

The financial sustainability indicators for the city are strong. The city shows that it has the ability to repay its debt. The city produces net revenues of 1.59 times the annual debt service requirements for the first year of principal repayment. This higher coverage level indicates the city’s ability to handle unexpected expenses or declines in demand and still meet debt service requirements.

Additionally, the long-term condition of the system is sound with an asset condition ratio of 26 years. This indicates a high level of reinvestment in the city’s long-term assets to generate future revenues.

The city scored well on other indicators showing the overall health of the city. Overall, the city has been able to retain its revenues, as evidenced by an increase in the fund balance over the last five years relative to revenues. In addition, taxable property in the city has been stable over the last five years. This has resulted in an adequate net taxable assessed valuation per capita of $42,972.

The city maintains a good liquidity position with cash and short-term investments equal to 657 days of operating expenses. An amount over 250 days is considered to be a very high level of liquidity. Strong liquidity provides greater stability to the city by providing the resources needed to cover short-term, unplanned needs.

The city’s financial sustainability indicators are positive, operating trends are positive, and liquidity is high.

PURPOSE OF THE TWDB LOAN

Also according to the executive summary by the Texas Water Development Board of the loan application by the city:

The City of Edinburg (City) operates two water treatment plants (WTP) with a total combined capacity of 18 million gallons per day (mgd). The West Water Treatment Plant was built in 2007 with an eight mgd capacity. The East (Downtown) WTP consist of three treatment plants constructed between 1929 and 1991 and has a capacity of 10 mgd.

On September 19, 2013, the Texas Water Development Board (TWDB) committed a $10,425,000 loan (L1000190) from the Drinking Water State Revolving Fund (DWSRF) to fund an eight mgd expansion to the city’s West Water Treatment Plant. Subsequently, the city bid the construction of the project and executed a $13,093,300 construction contract. The city pledged its own funds to complete the project. However, the City’s intentions were to request additional DWSRF funding at a later time to complete the project in lieu of using its own reserve funds.

During the course of the project, the city identified issues with its reservoir system that would limit the full use of the WTP’s expanded capacity. Thus, to address these additional project needs, the city now plans to include the rehabilitation of the existing reservoir system and construction of a new raw water pump intake and lift station at the West WTP.

The city’s current request includes the additional funding necessary to complete the construction of the eight mgd expansion of the West WTP, as well as for the planning, design, and construction costs related to the reservoir system improvements.

According to the City of Edinburg Public Information Office, the expansion includes two raw water pumps, rapid mix, two contact reactors clarifiers, filter building and gallery, clearwell transfer pumps, a two million gallon ground storage tank, three high service pumps, two bulk storage tanks, chemical feed pumps, a sludge pump for clarifier and recovery basin, sludge thickener, two progressive gravity sludge pumps, two meter belt filter press, sludge dewatering building, maintenance building, yard piping, and improvements to the reservoir system that will help meet the new raw water requirements of the expanded treatment capacity.

The West Water Treatment Plant is one of two the City of Edinburg owns and operates. The Downtown Plant, located at 500 E. Mahl, has a capacity of 10 million gallons per day. Combined, the two plants will give Edinburg a total of 26 million gallons per day with the ability to service 36,848 connections at half a gallon per minute, per connection. Currently the city services 27,052 connections. The expansion was needed to accommodate the continuous growth throughout the City which is now home to 89,000 people.

More information on the city’s water treatment plants is available online at: http://www.cityofedinburg.com/watertreatment.php

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Jennifer Sáenz contributed to this article. For more information on the Edinburg Economic Development Corporation and the City of Edinburg, please log on to http://edinburgedc.com or to http://www.facebook.com/edinburgedc

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