TO:	Honorable Eddie Lucio, Jr., Chair, Senate Committee on Intergovernmental Relations
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	SB914 by Campbell (Relating to the creation of the Kendall County Water Control and Improvement District No. 3; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.), As Introduced

The Legislative Budget Board, in cooperation with the Texas Water Development Board (TWDB) and the Texas Commission on Environmental Quality (TCEQ), has determined that:
 
The bill creates Kendall County Water Control and Improvement District No. 3 (the "District") with the powers and duties of a standard water control and improvement district under Water Code, Chapters 49 and 51.

Population -The very specific description of the proposed boundaries does not allow staff to develop precise population estimates. Based on the Original Texas Land Surveys mentioned in SB 914, and using 2010 Census Blocks, the population is determined to be less than 88 persons.
     
Population growth in the specific area since the 2010 census is unknown. The 2010 population estimate for areas of Kendall County served by small systems or private wells (County-Other) is 18,525. The Kendall County-Other population projections approved for 2017 State Water Plan projects the population to grow to 21,866 in 2020, 25,866 in 2030 and 30,207 in 2040.
 
Location - The Proposed districts initial boundaries are described with a combination of Original Texas Land Surveys, and Official Public Records of Kendall County. Due to the complexity of these boundaries for the various sub areas of the district, staff is able to determine only the general location of the proposed district.
 
The proposed district's area is approximately 1.58 square miles in southern Kendall County, located directly south of the city of Boerne and west of Fair Oak's Ranch. The proposed district does not appear to fall within any existing Certificate of Convenience and Necessity (CCN) Boundaries. 
 
Comments on Powers/Duties Different from Similar Types of Districts:  This bill grants the District authority for road projects.

The bill allows the District to divide and specifies requirements for division.  The District may be divided only if the District has no outstanding bonded debt and is not imposing ad valorem taxes. 
The bill further specifies that on or before the 30th day after the date of adoption of an order dividing the District, the District shall file the order with the TCEQ.

The bill limits the District's use of eminent domain.  The District may not exercise the power of eminent domain outside the District's boundaries to acquire a site or easement for a recreational facility or a road project.

The bill specifies that at the time of issuance, the total principal amount of bonds or other obligations issued or incurred to finance road projects and payable from ad valorem taxes may not exceed one-fourth of the assessed value of real property in the District.

If the bill does not receive a two-thirds vote of all members elected to each house, the District may not exercise the power of eminent domain.

Overlapping Services:  TCEQ does not have mapping information for water and/or wastewater providers because this function was transferred from the TCEQ to the Public Utility Commission on September 1, 2014.  As a result, TCEQ is unaware of possible overlapping service providers.
 
TCEQ's Supervision:  As with general law districts, the TCEQ will have general supervisory authority, including bond review authority and review of financial reports. 
 
Water Use - SB914 specifies that "the district has the powers and duties provided by the general law of the state, including Chapters 49 and 51, Water Code, applicable to water control and improvement districts created under Section 59, Article XVI, Texas Constitution".
 
Within Kendall County, sixty-two percent of the total water use was groundwater (Trinity Aquifer) in 2014. Eighty-seven percent of all the groundwater pumping was for municipal use. The water source of the proposed district might pursue is unknown.