FINANCING PLAN

DEERHAVEN WATER LINE IMPROVEMENT PROJECT

Deerhaven Water Control & Improvement District

Deerhaven Property Owners Association

The Deerhaven Water Control and Improvement District and the Property Owners Association have developed a plan to upgrade our water system to ensure fire protection and meet governmental standards.  This letter includes the chronology of the project, a financing plan and the schedule to completion of the initial phase.

Chronology:

2003:  Naismith Engineering completed a report for the POA that found substandard materials in our system and non-compliance with depth standards, both violations of Texas Commission on Environmental Quality regulations.  Liability exists in the lack of fire protection and the TCEQ's ability to force compliance.

2006:  The POA organized the WCID; confirmed by the Llano County Commissioner's Court on March 1 and approved by Deerhaven Llano County voters on May 13.  The District's charter allowed it to contract for fire protection and to finance and construct water improvements.  The election authorized the WCID to levy and collect an ad valorem tax to fund fire protection and administrative costs.  The WCID was also charged with developing a fire protection plan.

2008:  Developed a fire protection plan and filed same with the TCEQ.  Deerhaven had no formal fire protection at this time.  Horseshoe Bay had declined to provide service.  A Volunteer Fire Department was formed.

2010:  Horseshoe Bay grants Deerhaven a 1 year fire protection contract with possible annual extensions if certain conditions are met, among them:         

1. Upgrade the water system to meet HSB's minimum firefighting standards.

2. Clear heavy brush, particularly around homes.

            3. Improve signage at low water crossings and at residences.

This is not an automatic renewal!

2011:  Preliminary engineering completed for phase 1, about 50% of the total project, which will meet HSB's fire protection requirements and provide 13 new fire hydrants.  No home or lot will be more than 1000 feet from a hydrant, the length of a standard complement of hose on fire trucks.  The cost estimate for this phase is $1,060,000.  We expect phase 2 to be built in increments over a number of years, on an as needed basis.

Financing Plan:

A financing plan is being proposed that utilizes a combination of ad valorem taxes and contributions from the POA:

Ø Ad valorem taxes levied by the WCID would be raised by about 12.2 cents per $100 valuation to yield $45,000 per year.

Ø The POA would transfer $19,600 of uncommitted dues revenues to the WCID for debt service.

Ø The POA would increase the dues on undeveloped lots by $70 per year to $250, the same as developed lots, to yield $15,250. (This would also be transferred to the WCID for debt service.)

The ad valorem tax increase would be effective Jan, 2013 and the $70 dues increase on undeveloped lots July, 2012.

The annual debt service will be approximately $79,000.

The preliminary engineering and financial plans will be submitted to the Texas Water Development Board in an application for financing. The application would be made if the project is approved by registered Deerhaven Llano County voters in an election tentatively scheduled for May, 2012.  There will be public meetings prior to the election to discuss the project.

Included here is a table to help you estimate the total cost to you based on your property:  “Total Tax and Dues” includes existing WCID taxes and POA lot dues.

Tentative Schedule:

Sept/Oct,  2011  -    Present preliminary engineering and financial plans to WCID and POA boards - get approval.

Feb/April, 2012  -    Voter presentations

May 8, 2012       -    Election day

July, 2012          -    Funding application to TWDB

            Sept, 2012         -   TWDB commitment

            Feb, 2013          -   Surveying and geo-technical work

            May, 2013         -    TWDB approval of construction plans

            July, 2013         -    Bidding phase and construction contract award

            Aug, 2013         -    Begin construction

            Mar, 2014         -    Construction complete

Please contact any member of the WCID with your questions.

______________________________                 _____________________________

  Joe Becraft   -   President ,  Deerhaven WCID                  Renea Latham  -  Chairman, Deerhaven POA

 Click Here to Print the Deerhaven Water Project Financing Plan