HOW DOES THE DISTRICT USE SURPLUS FUNDS?

The District sells bonds to fund water, sewer, and drainage improvements to serve land within the District.  Prior to the sale of District bonds, the Texas Natural Resource Conservation Commission (TNRCC) must review plans and specifications for the projects to be funded from bond proceeds and must approve the District’s sale of bonds for such specific purposes.  Proceeds of the sale of the bonds are deposited in the District’s “capital projects” or “construction” fund and are used to finance the construction of water, sewer,  and drainage facilities in the District. 

“Surplus funds” are any funds remaining after completion of the projects and any investment earnings on such funds.  The District’s use of surplus funds, like all expenditures by the District, is regulated by state law and agency regulations.

Surplus funds may be used to finance the construction of water, sewer, and drainage facilities in the District, subject to approval by the TNRCC.  If a District meets certain conditions, the District may use surplus funds for water, sewer, and drainage improvements without TNRCC approval, subject to submission of certain required information to the TNRCC and documentation of such surplus fund usage in the District’s annual audit report.

The Board of Directors of the District determines appropriate water, sewer, and drainage needs and, in conjunction with the District’s engineer, attorney, operator, bookkeeper, and auditor, plans the District’s use of any surplus funds in compliance with all regulatory requirements, including the receipt of proper approvals and filing of the required accounting.

Last year, the District received TNRCC approval to use surplus funds to construct facilities related to sludge treatment at the wastewater plant; to convert chlorine gas disinfection systems to sodium hypochlorite disinfection at the District’s two water plants; to locate, repair, clean, and televise certain sanitary sewer manholes; to rehabilitate part of the District’s sanitary sewer system; to replace the fence and gate at one of the District’s lift stations; and to replace water meters registering in excess of one million gallons.  Recently, the District submitted an application to the TNRCC for approval to use surplus funds to install emergency power generators at the District’s water plants, sewage treatment plant, and four lift stations so District customers will have water and sewer services in the event of power outages in the area.