Killeen’s investment in a water treatment plant on Stillhouse Hollow Reservoir is expected to meet the city’s water needs for another two decades, according to the city’s public works director.
The proposal to construct a Stillhouse plant will add 10 million gallons of treated water per day to the city’s existing 32 million gallons per day capacity out of Belton Lake.
According to standards set by the Texas Commission on Environmental Quality, once a city reaches 85 percent of its peak treatment capacity, it is required to begin planning for the future before its supply is tapped out.
In 2011, during historic drought conditions, Killeen came within a few hundred thousand gallons of 85 percent of its water treatment capacity.
Another provision regulated by the TCEQ limits the number of taps the city can allow based on its treatment capacity — the 0.6 gallon per minute rule.
According to the 0.6 rule, for every connection, water has to flow at least 0.6 gallons per minute from each.
Scott Osburn, public works director, said the city currently has about 54,300 connections. On a treatment capacity of 32 million gallons per day, about 56,980 connections can tap into the supply. The city can bring 2,600 more connections online without violating the 0.6 rule. Osburn said the city adds anywhere from 1,000 to 1,200 connections annually.
“We’re at a point where it isn’t going to take us too much further before we basically come up against this rule,” he said.
Because the city continues to grow and move closer to being in violation of these provisions, the council instructed staff to move forward with Bell County Water and Control Improvement District No. 1 to provide an additional 10 million gallons of treated water per day.
Getting 10 million gallons out of Stillhouse Hollow should be sufficient until around 2033, Osburn said. At that time, the city will once again return to the drawing board to look at expanding the plant.
“Part of the (Stillhouse) proposal is that the plant that will be built will have the ability to expand,” Osburn said. “So, in the future, obviously once we start getting closer to that 2033 mark, we’re going to start looking at its expansion potential to bring additional water online.”
The city’s raw water supply should take it to 2060, Osburn said. Through the city’s 50-year-old agreement with the district, it has about 40,000 acre-feet of raw water. An acre-foot is equivalent to one acre of land filled a foot in depth with water.
Osburn said although the city’s raw water is expected to be sufficient through 2060, as it begins adding treatment capacity near 2033, it will also seek additional raw water.
“Water is scarce,” he said. “Anytime you can grab some water, it’s in a city like Killeen’s, with its growth, best interest to grab that raw water.”
The Stillhouse Hollow plant will serve neighboring cities as well as Killeen. The city is expected to fund nearly $30 million for the plant’s construction.
Martie Simpson, city finance director, said the city’s total debt service is a little more than $87 million — that includes existing debt and the debt that will come into play once the city enters negotiations regarding the new treatment plant.
Simpson said after staff consulted with the city’s financial advisers, they determined the best option for the city is to put in an initial cash outlay of $5 million because the city’s water and sewer fund is “extremely healthy.”
She said because of the water and sewer fund’s balance, it isn’t necessary to issue capitalized interest on the Stillhouse project.
Capitalized interest is the interest incurred during the time it takes to have the facility up and running as intended.
Through the water and sewer fund, the city can cover that cost plus the $5 million cash outlay, which will drive the total debt service down about $9 million, Simpson said.
“You see a substantial drop in what that debt would be because of the capitalized interest portion,” Simpson said. “(That is) because of putting the money up front (and) because of interest saving over the term of the debt issuance.”
Osburn said a “main focus” going into negotiations to build the new plant is to mitigate or minimize the impact on existing water rates.
He said several factors go into water rates, including capital costs, debt services, operation and maintenance costs on the part of the city and the district.
“Obviously with capital costs of this, there is going to be some effect,” he said. “But the city’s goal is basically to average that out over time.”
Simpson said rates would not have to be raised until the 2018 fiscal year, but consultants to the city recommended that instead of waiting until then, the city should “spread that out” and start looking to raise rates in fiscal year 2015.
Simpson said the increase would be “fairly small.”