1. City of San Juan Water & Wastewater Systems Improvements Hidalgo County, Texas Presented to: Project Sponsor and Agency Stakeholders July 24, 2003 City of San Juan Rapid Assessment Process Project Strategic Plan

2. City of San Juan Rapid Assessment Process Project Strategic Plan  General Aspects  Environmental and Human Health Indicators  Environmental, Human Health and Sustainable Development Strategy  Technical Approach, Objectives and Funding Plan  Public Participation Strategy  Project Development Schedule Agenda

3. City of San Juan Rapid Assessment Process Project Strategic Plan General Aspects  The City of San Juan is located in Hidalgo County, approximately 5 miles east of the the City of McAllen. The City is approximately 5 miles north of the U.S./ Mexico Border. Project Location

4. City of San Juan Rapid Assessment Process Project Strategic Plan State of Existing Water Treatment, Storage, & Distribution System General Aspects  Originally constructed in the 1960s, Water Treatment Plant I (WTP-I) has a treatment capacity of 1.5 MGD, but with a much needed upgrade. Currently operating when Water Treatment Plant II goes off-line for maintenance. An onsite clear-well has a storage capacity of 1.0 MGD.  Water Treatment Plant II (WTP-II) is the largest and primary water treatment plant with a treatment capacity of 3.5 MGD and a clear-well storage capacity of 439,000 gallons.  Raw water is obtained from the Hidalgo County Irrigation District No. 2. Total storage of treated water is approximately 2.0 MGD which meets TCEQ requirements.  On-site visit to WTP-II showed four filters, which are backwashed daily, consuming approximately 200,000 gallons of treated water per day. Asbestos Concrete & Steel water lines are still present in the distribution system. Testing of these lines showed no contamination, but these line materials have been banned for use by the TCEQ.  Undersize pipes and recent waterline breaks show that some water lines are located within private properties.  Existing water rights are typically supplemented with spot purchases from Hidalgo County Irrigation District #2.  Concern: Capacity impacts due to WTP-II filters backwash requirements. Capacity impacts of summer. Asbestos Concrete (AC) & Steel lines. Inaccurate system inventory.

5. City of San Juan Rapid Assessment Process Project Strategic Plan WTP-I upgrade or replacement to meet system demands. WTP-II upgrade and expansion through the addition of claricones, filters, clear-wells and other necessary equipment to overcome shortages. The water distribution system will be upgraded by replacing over 115,600 linear feet of AC and steel water lines throughout the City. Waterlines will be relocated out of private property and within easements which will need to be purchased. Fire hydrants and additional necessary equipment will be replaced and/or added to the existing distribution system to meet demand and safety requirements, as well as the replacement of undersized lines. Secure adequate water rights.  Total Estimated Cost – $11,700,897 (Based on DWSRF IUP Application); 2003 DWSRF has approved $1,125,000 for the water storage component of the project. Proposed Water Systems Improvements General Aspects

6. City of San Juan Rapid Assessment Process Project Strategic Plan Existing Water System

7. City of San Juan Rapid Assessment Process Project Strategic Plan  Recent upgrade construction work at the wastewater treatment plant (WWTP) rated the plant at 4.0 MGD, from which 30% is currently used.  The City provides wastewater collection inside and outside the city limits.  Approximately, 65% of the service area has sewer service coverage. The City also supplies sewer service to areas where North Alamo WSC provides water service.The remaining 35% does not have sewer service at the present time.  Areas of concern with the existing collection system includes clay collection lines and brick-lined manholes which cover most of the Original Townsite of the City, creating infiltration and leak problems in the area.  Concern: Environmental and human health risks due to existing clay collection lines and brick-lined manholes in the Original Townsite of the City, leading to infiltration and leak problems. Existing not served areas. State of Existing Wastewater Collection & Treatment General Aspects

8. City of San Juan Rapid Assessment Process Project Strategic Plan Wastewater Collection System Upgrade and Expansion throughout the Original Townsite of the City:  Replacement of approximately 86,700 linear feet of clay sewer lines.  Replacement of approximately 300 brick-lined manholes. Extend wastewater service to 3 Colonias covered in the 2003 CWSRF.  Total Estimated Cost – $5,869,296 (Based on City Engineer’s Estimates); 2003 CWSRF has been approved in the amount of $1,300,000 to support wastewater service to 3 Colonias. Proposed Wastewater Systems Improvements General Aspects

9. City of San Juan Rapid Assessment Process Project Strategic Plan Existing Wastewater System

10. City of San Juan Rapid Assessment Process Project Strategic Plan  Population served: 26,226 (Amended population served 28,000/County population estimate 42,000)  Growth rate (90-00): 142.5%  MHI: $22,706.00 Project Sponsor Profile: General Aspects  Unemployment rate: 5.3%  4,953 water accounts  4,628 sewer accounts Water ServiceNumber of ConnectionsAverage Monthly Bill Residential4,593$19.10 Commercial/Industrial360--- Sewer ServiceNumber of ConnectionsAverage Monthly Bill Residential4,268$14.30 Commercial/Industrial360---

11. City of San Juan Rapid Assessment Process Project Strategic Plan  The City is concerned that the lack of adequate storage water capacity would lead to violations of the requirements of the water treatment permit and of the Texas Administrative Code (290.44D).  The City of San Juan received a Certificate For Outstanding Performance from TCEQ for having no violations related to the “Total Coliform Rule” in their public water system from 1997 to 2001. Environmental and Human Health Indicators Compliance with Environmental Norms & Regulations

12. City of San Juan Rapid Assessment Process Project Strategic Plan Environmental and Human Health:  Document potential environmental impacts caused by outdated infrastructure technology, such as clay sewer pipes, brick-lined manholes, AC and steel lines.  Describe the risk of inadequate clear-well storage capacity, which may lead to low pressures in distribution system or insufficient water supply.  Referenced the enforceable standard requiring fire flow protection.  Eliminate the risk associated with current water system needs for fire protection, pressure, delivery, storage and treatment.  Invite Texas Historical Commission to participate in project planning. Environmental, Human Health and Sustainable Development Strategies

13. City of San Juan Rapid Assessment Process Project Strategic Plan Sustainable Development:  Conducting Sustainable Development Workshops; Baseline Conditions report complete.  Water Conservation and Drought Contingency Plan needs to be updated.  Operator review at 30% design.  Rate Study – Determine affordability with sufficient funds to support O&M and reserves. Request submitted to the NADB. Environmental, Human Health and Sustainable Development Strategies

14. City of San Juan Rapid Assessment Process Project Strategic Plan Water System Improvements  Upgrade or replace WTP-I and to build additional potable water storage facilities at WTP-II.  Replacement of approximately 115,600 linear feet of AC and steel lines, fire hydrants and necessary equipment throughout the City. Wastewater Collection System Improvements  Replacement of approximately 86,700 linear feet of clay sewer lines and 300 brick-lined manholes within the Original Townsite of the City. Technical Approach,Objectives and Funding Plan Project Objectives

15. City of San Juan Rapid Assessment Process Project Strategic Plan Recommended Technical Approach Technical Approach,Objectives and Funding Plan  PDAP Eligible Tasks  Complete Facility Planning  Quality Assurance Project Plan – TBD  Environmental Assessment  Financial Analysis  Public Participation Program  Preliminary and Final Engineering Designs  O&M Plans  Non-PDAP Eligible Tasks  Updated Water Conservation and Drought Contingency Plan  Rate Study  Infiltration/Inflow Study  Vulnerability Assessment Plan  Emergency Response Plan  Management Study (Rates, Billing/Collection/Operatior Retention)  Administrative & Operator Training

16. City of San Juan Rapid Assessment Process Project Strategic Plan Institutional Capacity Building Technical Approach,Objectives and Funding Plan  The Frank M. Tejeda Center has conducted an Institutional Capacity Needs Assessment with the City of San Juan. The Assessment reviewed the following areas:  Regulatory Compliance Issues  On-going Projects and Planning  Existing Planning  Project Development and Funds Management  Outsourcing  Operational Capacity  Management Capabilities  Governance

17. City of San Juan Rapid Assessment Process Project Strategic Plan Project Sponsor Financial Potential Technical Approach,Objectives and Funding Plan The City of San Juan maintains an capital improvement fund at an estimated $500,000 capital improvements, in addition to the user fees charged to the citizens for the services. Financial segment information for 2002 is presented below. RevenuesExpenses Water Sales$1,290,851Salaries and Wages$710,313 Sewer Sales$1,102,389Employee Benefits$164,645 Interest Earnings$26,915Supplies$186,441 Miscellaneous$54,397Repair and Maintenance$58,012 Reconnect Fees$44,305Water, Sewage Treatment and Other$207,775 Tap Fees$69,960Other Expenses$266,283 Penalties and Service Charges $61,140Operating Transfer Out$534,500 Bond Interest$154,522 Depreciation Expense$525,000 Total Revenues$2,649,957Total Expenses$2,807,491

18. City of San Juan Rapid Assessment Process Project Strategic Plan  Texas Water Development Board (TWDB)  Funds may be available through TWDB DW/CW SRF, Dfund II, EDAP and CWTAP  The City has applied in February 4, 2003, to be considered for fiscal year 2004 DWSRF IUP.  North American Development Bank (NADB)  BEIF and IDP  Funds through the Texas Hook-Up Program - 2001  Border Environment Cooperation Commission (BECC)  PDAP program  Texas Office of Rural Community Affairs (ORCA)  Community Development Block Grant (CDBG) Identified Potential Funding Sources Technical Approach,Objectives and Funding Plan

19. City of San Juan Rapid Assessment Process Project Strategic Plan  Utility rate adjustments.  Easement acquisition.  Recent County Tax Increase: Property taxes by 16% & Appraisals by 22%.  Historic Preservation within Old Town Site. Potential Obstacles Public Participation Strategy Local Politics  The City held elections in May 2002 to appoint a mayor and two City Commissioners. A special election was held on February 2002, with a run-off election in March 2002, to fill a City Council vacancy.  Recently amended Charter for use of Sales Tax and Proposed Bond Issue.  Local organizations: San Juan Chamber of Commerce; Kiwanis; Boys & Girls Club; P.S.J.A. School District; Lower Rio Grande Development; and United Farm Workers. Socio-Economic Indicators  Approximately 1/3 of the population lives below poverty.  Approximately 55% of the population has less than high school education.  US census describes 5% unemployment.  Extreme Growth Rate of community.

20. City of San Juan Rapid Assessment Process Project Strategic Plan Project Schedule