San Jacinto Water Authority Readies $14.8M Sale For Its Woodlands Division

DALLAS — The San Jacinto River Authority plans to bring $14.7 million of special-project revenue bonds to the competitive market later this month on behalf of its Woodlands division. RBC Capital Markets is the financial adviser to the SJRA, and Schwartz, Page & Harding is bond counsel. Proceeds from the sale will be used to upgrade water supply and treatment facilities and wells. The debt is secured by the revenue generated from the sale and distribution of water to municipal utility districts within the authority’s jurisdiction, which includes parts of Houston, all of Montgomery County, and parts of Harris, Walker, Waller, San Jacinto, Grimes, and Liberty counties.The Woodlands division operates three wastewater treatment facilities with numerous pump stations, wells, storage tanks, and distribution facilities for the community. It is one of three divisions operated by the SJRA. On Nov. 6, voters in the Woodlands, one of the nation’s first master-planned communities, face a few ballot questions that will shape the growing community for years to come. The suburb about 25 miles north of downtown Houston was formed in 1974 and is currently governed by homeowner and commercial associations. Officials want to expand the boundaries of the Town Center Improvement District to include the entire community with broader taxing authority. If approved, the district would create an economic development zone and be allowed to impose an additional one-cent sales tax within the boundaries of the zone. There is already a one-cent tax on goods purchased in the district. Voters also will decide on a measure to form a seven-member elected district board by 2010.Approval of the initiatives would stave off possible annexation by Houston or Conroe, as per agreements reached with those cities. The Woodlands estimated 2007 population of nearly 70,000 is up about 20% from the 55,649 reported as of the 2000 Census. The San Jacinto River Authority last sold bonds on behalf of its Woodlands division in 1999, according to Mike Jackson, controller of the authority. He said the referendums to be voted on next month by residents of The Woodlands shouldn’t impact the authority whether approved or rejected. Standard & Poor’s rates the SJRA’s credit at BBB-plus, citing the creditworthiness of the municipal utility districts participating in authority, and a “relative lack of development of some of the participants with either modest property tax bases or a small number of customer connections, ultimately providing revenues to the authority.” Some mitigating credit factors include the participants’ aggregate strengths, such as well-managed rates and directions of development, manageable debt levels, rapid residential growth, and above average cost per connection, according to Standard & Poor’s. Neither Moody’s Investors Service nor Fitch Ratings rates the credit.