Lago Vista taxpayers, budget has $0 for high-priority water lines

Hall spoke as the council's liaison to the committee, so his report is one member's account, not a council decision.^6,7 His report was listed among "Routine reports from City Council Liaison," not as an action item.⁸ Hall voted for the 2026-27 budget when the council adopted it 4 to 3 on Sept. 17.^9,10

What the committee is and who reported

The 2017 ordinance that reestablished the Golf Course Advisory Committee (GCAC) says its job is to "advise the City Council through the City Manager" about the city's golf courses. It acts "in an advisory capacity only" and has no power to "authorize any expenditures out of the City's budget." One council member serves as its liaison, who "shall have no voting privilege."⁷ The committee's Sept. 22 draft minutes name Hall as that liaison.⁶

The City Council, not the committee, adopts the city budget.¹¹ The Capital Improvement Program (CIP) is the city's list of big building and repair projects, which the budget describes as "addressing the City's infrastructure and long-term capital needs."¹² Certificates of obligation (COs) are a kind of city debt. The credit rating firm Standard & Poor's Global Ratings (S&P) wrote that the city's 2024 certificates are paid from "a continuing direct annual ad valorem tax," which is a property tax.¹³

How we got here

The Texas Water Development Board (TWDB) "provides financial assistance to eligible political subdivisions for water system infrastructure projects."¹⁴ On Aug. 2, 2024, Shane R. Saum, now the mayor, posted on the council message board a letter the city had sent to the TWDB. The letter said that "with limited bond capacity, finding alternative funding sources is crucial."¹⁵ A Texas State University report in the council's Jan. 6, 2026 packet said the city's budget did not give "legal debt limits."¹⁶

On July 2, 2026, the council voted 5 to 0 for Resolution 26-2214, which allows an application to the TWDB for aid "not to exceed $10,000,000" for water system work.^14,17 Saum, Owen, Prince, Chavarria, and Hall voted yes, and the minutes list no vote by Benefield or Van Ness.¹⁷ On Sept. 2, the TWDB invited the city to apply for a loan from its Clean Water State Revolving Fund, a state program for sewer projects. The completed application is due Nov. 2, 2026.¹⁸

On Sept. 17, Saum and Council Members Adam Benefield and Amanda Chavarria voted against the budget.⁹ On Sept. 21, Mayor Pro Tem Norma Owen wrote that "approximately $19 million of identified infrastructure repairs and improvements remain outside the current operating budget." She wrote that if outside funding did not come, "critical projects will have to be delayed, financed with new debt or paid from reserves."¹⁹ Hall asked for a Sept. 25 special meeting to revise the adopted budget and tax rate, which our earlier story covers.²⁰

At that meeting Hall called the adopted budget "a budget that was not truly balanced."²⁰ On Sept. 30, Saum posted preliminary schedules for the sewer loan that total $45,796,017 and $47,544,597 in payments, as our earlier story reported.⁵

On Oct. 1, Interim City Manager Ron Joy told the council that the city "will contract an Engineer" with the firm Freese and Nichols. The minutes describe the job as "Engineer / Dev. Serv. Director."²¹ At a work session that day, a staff member said the city had submitted the state's letter of intent for the loan.²² The minutes list no motion on that item and say only that the "Mayor states Council would like updates on the development of the application."²¹

The same day, the council voted 7 to 0 to ratify staff's emergency repair of the wastewater plant lift station discharge piping.²¹ Public Works had a proposal for it from Mills Construction, LLC "in the amount of $139,000," as our earlier story reported.²³

The Oct. 15 council agenda listed a closed-session item on the city's "reorganization."²⁴ Back in open session, Owen moved that staff carry out what was directed "in regard to personnel and their salaries," and Prince seconded. The chair said the motion was "approved unanimously," as our earlier story reported.²⁵

On Oct. 21, the city said the council had "approved a new organizational structure" with "three new Executive Director positions." The announcement gave no cost or fund, as our earlier story reported.²⁶ The same day, Saum wrote on Facebook that in November the council "will hold two strategic planning meetings with an experienced municipal facilitator."²⁷

The Oct. 27 liaison report

The meeting

The committee met in a regular meeting at 6:30 p.m. on Oct. 27 in the City Council Chambers at 5803 Thunderbird.⁸ The Sept. 22 draft minutes had listed Oct. 27 as the next meeting date.⁶ City Secretary Robin Smith certified that the agenda was posted by 5 p.m. on Oct. 20. The agenda lists "Routine reports from City Council Liaison."⁸

The chair said, "Let's go back to city council liaison reports." Hall said he would cover "three major areas."²⁸ He said an interim engineer would help the city "create a change order" for a golf course pipe.¹

Reorganization and jobs

Hall said "the city is reorganizing its departments and putting executive director level for four of those in place."²⁸ The city's chart shows the three executive directors and the police chief reporting directly to the city manager.²⁹ Saum wrote that the reorganization "doesn't change" the police chief's leadership structure.²⁷ Hall said "those positions haven't been filled yet."²⁸

The city's jobs page, read Oct. 28, lists all three executive director jobs. Two list a closing date of "November 2, 2026 at the end of business," and the third lists none.³⁰ Hall said "we are challenged with a staff capacity to take on projects."²⁸ The jobs page also lists openings for a building official and a wastewater plant operator.³⁰

Interim engineer

Hall said, "I think the contract has been finalized with Nichols to provide an interim engineer."¹ He later said, "either have that contract signed or close to it."³¹ Saum wrote on Sept. 30 that one of the last actions of former Interim City Manager Isaac Turner was "to bring Freese and Nichols in to cover our engineering and development services needed."^9,32 The Oct. 15 agenda lists no item on an engineer contract, and the records we reviewed include no signed contract or price.²⁴

Budget and capital projects

Hall said the city has "some major CIP projects that are high priority must be done." He said the projects "are not in the budget." He said the money could come from "cuts in the budget in other areas, or whether that comes out of reserve funds."¹

The capital plan in the adopted budget lists a program to replace aging asbestos cement (AC) water lines, called AC Line Replacement, as a high priority with a total cost of "TBD." It shows $0 in every year and names "Future Funding" as the source.² A $10,000,000 project to replace the Allegiance water tank relies on a "TWDB Grant - Proposed." That page says the project depends on "the amount and conditions of the proposed TWDB grant award."³

The sewer plant line, wastewater treatment plant (WWTP) Improvements, totals $9,820,000 and lists "Wastewater Impact Fee/ Future Funding." "Future Funding" covers $5,000,000 in 2027-28 and $4,000,000 in 2028-29.³³ Owen wrote that some of the projects are "shown as grant-funded or dependent on future financing." She added that "those grants have not necessarily been awarded."¹⁹

Leftover bond money

Hall said that for the golf course "there are bond funds available."¹ Asked about capital money, he said the money "left over" from the irrigation system is "bond money that we already have." He did not give a dollar amount.³⁴

Our irrigation story covered the rebuild those certificates pay for. The CIP manager's summary of the 2024 certificates shows $290,033.77 remaining of $4,095,000 approved for golf course irrigation. Another $2,295,715.68 is marked "Potentially Unprogrammed / Available," which our parks story also reported. A disclaimer says the amounts "have not been independently reconciled or validated by the Finance Department." The page says the historical sewer plant spending and the starting balance "should be confirmed with Finance before any reallocation decision."³⁵

Strategic planning and aging systems

Hall said the council would go "through a strategic planning process in November, where we will be focusing on 3 to 5 high priorities." He said he thinks "there will be a consensus of infrastructure" as the first priority, naming "water, sewer, roads."³⁶ Saum wrote that he expects "water and wastewater infrastructure, including how we responsibly finance those investments, to be a major priority."²⁷

Hall said that at a certain point "you can't kick it any further." He added that the water and sewer projects "will have to be dealt with in the next year or two." He said delay means "the likelihood of catastrophic failure will be increased and the cost of that will be increased."³⁶

The budget says the Allegiance tank project would replace aging water infrastructure that "has reached or is approaching the end of its useful life."³ The AC line page says many existing asbestos cement pipes "are approaching or exceeding their service life." Those pipes "are more susceptible to leaks, breaks, and reduced system reliability."² The state's 2027 plan describes the sewer plant's problems as including "leaking effluent ponds that pose environmental risks."³⁷

The loan

Hall said the city is looking at applying for "a grant" that "would be essentially a loan" at a "low interest rate" for "our water sewer systems." He gave the half-million figure as an example.⁴

Asked whether the rate was variable or fixed, Hall said, "I am not qualified really to talk about those details." He said "it would be a fixed interest rate is what I understand." He added that the loan would come "with some money being forgiven." He also said the city "would have to put in some money commit upfront." Finally, he said the details were "all to be determined."⁴

The July 2 resolution covers "water system improvements and repairs."¹⁴ The Sept. 2 invitation covers the city's sewer plant project.¹⁸ The preliminary schedule for the sewer loan lists a 3.500% interest rate and a first payment of $1,529,192 in the year ending Sept. 30, 2028. A second option, at 3.800%, starts at $1,587,597 that year.⁵ The records we reviewed show no $500,000 payment figure and do not say which application Hall meant.^5,14

The state plan says the loan program "offers subsidized interest rates and additional subsidization typically in the form of principal forgiveness." The plan sets a maximum repayment period of 30 years.³⁸ The records we reviewed do not say whether any of Lago Vista's loan would be forgiven.^37,38 Saum wrote on Sept. 30 that the city still needed to confirm "any costs the City would initially carry."³²

Borrowing limit

Hall said, "there's a limit on how much the city can actually have in bond funding." He added "we've got some room," but that with "tens of millions of dollars of CIP projects, we can quickly run out of room." Then he said, "in the next five years, we could be, we could be hitting that limit."⁴

S&P wrote in January 2024 that "State statutes limit the ad valorem tax rate for home-rule cities to $2.50 per $100 of taxable assessed valuation." It added that "the Texas attorney general permits the allocation of $1.50 of the $2.50 maximum tax rate for ad valorem tax debt service."¹³ The adopted budget lists the debt part of the city's tax rate, called Interest and Sinking (I&S), at $0.186463 per $100 for 2026-27, up from $0.174184. Our debt story explains what that rate costs a median home.¹² S&P also called the city's debt profile "very weak" in 2024. The records we reviewed do not say which limit Hall meant or how he reached five years.¹³

November meetings and emergency repairs

Asked whether the council could act in time, Hall said the council has two meetings in November.³¹ When the chair said there were no meetings in December, Hall answered, "Sometimes we have special meetings called."³⁹ The city's meeting portal, read Oct. 28, lists no council meeting in November or December and no minutes for Oct. 15.⁴⁰

Hall said there are "continuing breaks that are major breaks in our water and sewer systems." He said some "have been emergency repairs, $150,000, emergency repairs."³¹ The records we reviewed do not say which repairs Hall meant, or whether they include the $139,000 lift station repair.²³

After Hall's report, the committee took up a motion "to create a proposed change order and present it to our city council liaison in hopes that he can get it on the agenda for November 5th." It passed on a voice vote with one member voting no.⁴¹

What it could mean for taxpayers

Hall said each bond "just adds to the cost of the budget for the next year." He said it "increases the pressure on our operating budget."⁴ The first preliminary schedule lists a payment every year through the year ending Sept. 30, 2057. Interest on that schedule totals $17,596,017.⁵

That schedule is titled "Comb. Tax & Ltd. Pledge Revenue Certificates of Obligation."⁵ Saum wrote that existing utility debt, revenues, and costs "still need to be incorporated or verified before determining any utility-rate impact."³² Both preliminary schedules measure the payments against water and sewer revenue.⁵ One option is certificates backed by a property tax and a limited pledge of water and sewer revenue, and the other is "Water and Sewer System Revenue Bonds."^5,13 The records we reviewed show no final choice.⁵

The state plan lists "subsidized interest rates."³⁸ Saum wrote that the state's reviews "provide additional expertise and accountability" for a small staff.³² Lower rates and any forgiven principal could reduce what residents repay.³⁸

Any loan would also add a yearly cost for decades, and the first schedule runs to 2057.⁵ Waiting could also cost more. A Federal Highway Administration publication describes agencies that "allow pavements to deteriorate until reconstruction is the only option, resulting in higher costs and more pavements in poor condition." The publication covers roads, not water lines.⁴²

Owen wrote that Lago Vista "was already on a path toward a very tight reserve position." She wrote that the "precise timing cannot be responsibly forecast until the CIP is validated."¹⁹

Where it stands

The loan application is due Nov. 2, 2026, and the state requires a pre-application meeting.¹⁸ Two executive director postings close the same day.³⁰ Saum's post says the council will hold two strategic planning meetings in November.²⁷

How to weigh in

The Oct. 15 council agenda said anyone speaking during citizen comments "must submit a completed form."²⁴ The city says requests for records go through its online portal, and it has up to ten business days to respond.⁴³

What we could not find

• A signed Freese and Nichols contract, its price, or an agenda item for it.²⁴
• A $500,000 payment figure for any loan.⁵
• A city record that says which debt limit Hall meant.¹³
• Finance Department confirmation of the $290,033.77 and $2,295,715.68 figures.³⁵
• A list of the emergency repairs behind the $150,000.²³

What you can do

• The city says requests go through its NextRequest portal, and it "has up to ten business days in which to respond."⁴³
• Texas law makes "information in an account, voucher, or contract relating to the receipt or expenditure of public or other funds" public.⁴⁴
• State law also makes public "information used to estimate the need for or expenditure of public funds or taxes."⁴⁴
• Ask the city for the interim engineer contract and its price.
• Ask for any study of the city's legal debt limit or borrowing room, and any five-year debt forecast.
• Ask for any payment schedule for the city's state water application.
• Ask for the list of recent emergency water and sewer repairs, with their costs.
• If you have records on this, you can share them with us at /share-records.