FAQ's for Lake Placid Members and others
What is a Water Control and Improvement District (WCID)?
A WCID is a type of conservation and reclamation district empowered by the State of Texas to control and preserve the waters of the State of Texas. A WCID is empowered to finance, build, construct, improve, reconstruct, repair and maintain dam facilities. It is a type of governmental entity and will be governed by a board of directors elected by the registered voters within the District. Upon approval by voters, a WCID is authorized to levy annual ad valorem property taxes to fund district operations and costs. Our plan is for the WCID to work with GBRA to fund and repair the Lake Placid Dam and maintain the lake at its normal level, but with a modern dam and funding to ensure it is maintained in perpetuity. As all other efforts to seek funding have been unsuccessful to date, the WCID is the only means of raising the necessary financing to make the repairs to the dam.
The WCID will operate as an agency of the State of Texas and will oversee and approve the repair and construction of the dam by GBRA, collect both the property tax through the County Tax Assessor and collect gross GBRA Hydroelectric Revenues, pay all bills of the operation of the WCID including payments to GBRA for debt service and operation and maintenance.
How will the replacement and upgrading of the Lake Placid dam, referred to as (TP4), be paid?
We have agreed with GBRA to pursue funding for the dam reconstruction from the Texas Water Development Board, which under Senate Bill 8 passed last spring and ratified by the electorate in November will have funds available at very low rates for the kinds of infrastructure projects that we need for Lake Placid. GBRA is working to secure the loan with their credit rating, and we will repay them over approximately 30 years.
The property owners that own property on Lake Placid will be asked on November 3, 2020 to approve an ad valorem property tax that should be sufficient to pay back the money borrowed to repair the dam including all debt service, debt reserve requirements, and capital repair and replacement costs.
How do I estimate my incremental tax increase?
Please see the following hypothetical examples. These examples must be viewed as estimates. Please note the financial impact if a 0% interest loan is not secured.
Can WCID taxes increase over time?
Because the taxes will be applied to make a fixed debt payment that will work much like a mortgage, the dollar amount of taxes for any home will be more or less level over the life of the loan. The annual payment under our contract with GBRA will be a fixed dollar amount each year. As property values return to their previous levels, it should be possible to raise the same annual payment requirements with a lower tax rate. It is likely that the tax rate will decrease over time as values go up, but the actual dollar amount of taxes on a particular home will stay more or less constant.
How many years will the state loan be in place?
The duration of the loan will be 30 years.
At the end of 30 years, will the ad valorem tax end?
No, some amount of taxes will annually be assessed to each taxpayer for the maintenance of the dam and for the administrative costs of the Water Control Improvement District (WCID).
How much will the dam maintenance and administrative incremental costs be?
The Guadalupe Blanco River Authority and the Water Control Improvement District will each submit a yearly budget on their anticipated costs.
Who will pay for the engineering study, preparation of bid package and procurement of bids from eligible contractors?
The taxpayers, these costs will be charged against the state loan. It is our understanding that GBRA are temporarily loaning the newly created WCID the funds that they are currently spending towards this effort. GBRA will pay the debt service, although, they will charge back the engineering service charges once the state funding is approved and received.
Will Lake Placid remain a recreation lake open to the public?
Yes, as required by Federal law for lakes and rivers crossed by Interstate highways.
Will the newly renovated dams be the property of the taxing district or taxpayers?
No, GBRA will maintain ownership of the dams and will maintain them.
Who will pay for the maintenance of the newly renovated dams?
The taxpayers, through the WCID.
Will power still be generated and sold from the newly renovated dams?
Who will receive the revenue from the sale of power from the newly renovated dams?
The WCID will receive the revenues on behalf of the taxpayers. These revenues will be used to partially fund the debt service and fund a certain level of repairs and replacement reserves. This is a positive contribution by GBRA for the taxpayers. The hydroelectric generation revenues from GBRA have averaged approximately $520,000 annually.
Will the taxpayers have any ownership in the dams or the supporting infrastructure?
Will the renovation be an upgrade or repair of the existing spill gates within the dam or will the existing spill gates be replaced with newer, more modern gates?
It has been agreed between GBRA and the WCID that the existing "Bear Trap" type gates will be replaced with modern "Hydraulic Crescent" gates. The new gates will have the ability to be raised and lowered from remote locations.
What is the timeline for the dam to be renovated?
The timeline has not yet determined. When the vote is passed, and the engineering study completed the contract will be put out to bid. At this time, it is uncertain when the engineering study will be complete. At this time, it is estimated that once the bid is awarded and renovation begins, the renovation period will be approximately 18 to 24 months dependent on weather and potential flooding conditions.
What will be the condition of Lake Placid between now and when the renovations begin?
We are told by WCID representatives that GBRA has agreed to do their best at keeping the lake at normal water level conditions and will manage the spill gates the best they can in the event of flooding conditions. In the event the spill gates fail, as Lake Dunlap's dam, the lake will remain at the prevailing level until renovations can be completed.
In the event all the initiatives for the lakes (McQueeney, Dunlap and Placid) pass, in what order will the dams be renovated?
It is not known at this time, we will report on that question as soon as we have a definitive answer.
How will the taxpayers know how their taxes are being spent?
At the end of each fiscal year, the WCID will select its own independent auditor to audit the District’s financial statements which will provide assurance to the taxpayers of the district that all monies collected have been properly accounted and reported. The audit will be provided to WCID within 120 days from the date of contract of the audit.
From year to year, how will the taxpayer know how much of their money will be spent by GBRA?
Each year, no later than 60 days prior to the beginning of the year, GBRA will provide WCID with a preliminary budget indicating all expected revenues and expenses for the coming year to operate the dam.
How will oversight take place once each new year begins?
The GBRA will be required to provide WCID with quarterly financial updates.
How is the Board/Management of WCID determined?
The current Directors are temporary. They will be made official pending an affirmative vote by the taxpayers at the November 03, 2020 election. The current pending WCID board members were selected by the CULP Board of Directors.
How will the WCID be governed?
The WCID will be a State of Texas entity and will be governed by applicable state law and regulation and will operate under a set of Bylaws.
What is the role of CULP in regards to resolving the problem of the possibility of the dewatering of Lake Placid?
Simply put, CULP has acted as the primary voice for the homeowners/taxpayers that live on Lake Placid. CULP's role has taken on the advocacy of saving Lake Placid. CULP has collected funds from the property owners and others and expended those funds to advocate saving the lake through supporting litigation to keep the lake from being dewatered and subsequent mediation which resulted in the permanent injunction to keep the lake open and to help determine a path of reconciliation that is palatable for both GBRA and the taxpayers and other users of our lake.
How does the Sutter lawsuit affect the Lake Placid WCID#1? Can’t we just wait for that case to settle?
With the filing of the Notice of Appeal, the William case and any litigated solution has been moved into the appellate courts and the associated timeline that likely will take several years to reach a verdict and final judgment. In the meantime, we will be proceeding with our resolution that provides for repair of the dams in the short term.
What is the status of the engineering of Lake Placid
To the Lake Plaid Community:
The CULP Board of Directors wants to be able to disseminate estimated timing information on the process of engineering and construction of the Lake Placid Dam, but the truth is we are well into the process, but it has proven difficult to get any commitments on firm time frames. We are at the mercy of those performing the engineering and other entities involved in the planning and construction as we proceed, so this information should not be used for any purpose other than getting some baseline information out to the CULP membership and other stakeholders of the lake. We know how it should go and have reason to believe that it will be something close to the estimated schedule stated below:
*Engineering / design phase is approximately 60% complete at this time and should be completed in October 2021.
*Final design will be submitted to the Texas Commission on Environmental Quality (TCEQ) and the Texas Water Development Board (TWDB) for approval.
*Upon approval of plans and specifications by TWDB and TCEQ, GBRA will issue a Request for Proposals. Proposals (bids) should be received and a contractor selected within 60 – 90 days.
*GBRA will execute a construction contract with the selected contractor. GBRA will submit the executed contract to TWDB for approval to issue Notice to Proceed. The construction timeframe will not commence until this Notice to Proceed is issued.
*At the time the construction contract is executed, GBRA will initiate the lowering of the lake. The lake lowering will be performed over a period of several days in collaboration with the Texas Parks and Wildlife Department. This is anticipated to occur as soon as January 2022 but GBRA will provide CULP and the Lake Placid WCID as much advanced notice as possible.
*Once the Notice to Proceed is Issued, the estimated construction time should is about 22 to 24 months assuming no flood events or other major weather delays occur during the course of construction.
Please keep in mind that this is a very rough schedule and may change significantly based on a myriad of factors necessary to construct a dam like ours, particularly weather delays.
Another key element is that GBRA has secured $40 million in bond funding at below market rate interest on behalf of the Lake Placid Dam project.
It is a slow process, but the good news is progress is being made and we are assured of having a new dam.
Thank you to all our CULP members and all the stakeholders of Lake Placid!
*Items confirmed by GBRA