The Magnolia City Council is considering financing options for water and wastewater facilities to support new developments coming to the area that will include roughly 5,000 homes.
According to Community Impact, council members last month were presented with a total cost of the facilities of $48.5 million, according to an estimate by Kelly Hajek with Strand Associates, engineering consultants for Magnolia City. The wastewater plant will be built near Mill Creek and will cost roughly $38 million while the water plant will be near Spur 149 and is likely to cost $10.5 million.
Strand Associates has suggested the new water plant should be operational prior to the city’s new users reaching 2,615 new connections. The city is looking forward to roughly 880 new connections for the services in the next year.
Magnolia City Administrator Don Doering said that while there is a degree of capacity at the plants, the demand is certain to increase quickly.
“So far we are in good shape,” Doering said. “But it is going to be a short period of time where we are obviously going to need more capacity.”
With the timeliness of the projects being of the utmost important, James Gilley, with US Capital Advisors, recommended that the city use market financing.
According to Gilley’s recommendation, market financing will require the city to pay off their obligations by 2047.
“If the development doesn’t happen as planned, then that could be a problem,” Gilley said. “Somebody has got to take the risk to build the infrastructure, and then the development will come.”
There are a number of other funding options available to the city, but as of March 10 a decision had not yet been made.
“We are not prepared to pursue financing, [as] we don’t have hard numbers yet,” Mayor Todd Kana said.
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