SECTION 293.83. District Use of Surplus Funds for Any Purpose and Use of Maintenance Tax Revenue for Certain Purposes

(a) Except as provided in subsection (c)(3) and (4) of this section, and as provided in subsection (d) of this section, a district must receive approval from the executive director before obligating the use of:

(1) surplus bond funds;

(2) interest earned on invested bond proceeds, grants, or contributions by others for costs sharing of facilities constructed with bond funds;

(3) proceeds from the sale of property originally acquired with bond proceeds, unless the proceeds are applied to retire the outstanding bonds of the district; and

(4) litigation settlements related to projects financed by bond proceeds.

(b) A district contemplating the use of operation and maintenance tax revenue for reimbursement to a developer (as defined in Texas Water Code (TWC), §49.052(d)), of property, or its assigns, for planning, construction, or acquiring facilities must receive approval from the executive director.

(c) Application requirements are as follows.

(1) For engineering projects, the following documents shall be submitted:

(A) a resolution by the governing board requesting approval of the project;

(B) construction plans and specifications approved by all agencies having jurisdictional responsibilities;

(C) a detailed explanation of the project;

(D) a detailed cost summary;

(E) if developer reimbursement from an operation and maintenance tax, operating budgets showing revenues and expenditures over the years from which the operation and maintenance tax revenue is derived;

(F) the number of utility connections to be added (if applicable) and area served;

(G) engineer's certification as to the availability and sufficiency of water supply and wastewater treatment capacities to serve such additional connections;

(H) a written statement from district's bookkeeper stating the amount and source of funding including how available funds were generated;

(I) the 100-year flood data for area to be served if not previously provided;

(J) evidence of compliance with the requirements of Subchapter E of this chapter (relating to Issuance of Bonds);

(K) an application fee in the amount of $100; and

(L) other information as the executive director may require.

(2) For expenditures other than engineering projects, the following documents shall be submitted:

(A) a resolution by the governing board requesting approval of the expenditure;

(B) a complete justification and explanation of purpose for which the funds are proposed for expenditure;

(C) if developer reimbursement from an operation and maintenance tax, operating budgets showing revenues and expenditures over the years from which the operation and maintenance tax revenue is derived;

(D) other information as the executive director may require; and

(E) an application fee in the amount of $100.

(3) Subject to the requirements prescribed in paragraph (4) of this subsection, a district which has a no-growth tax rate of $2.00 per $100 assessed valuation or less calculated by dividing its average annual debt service on existing tax supported debt by current taxable assessed valuation/100, may use surplus funds for improvements necessary to serve development within the district as follows without further approval:

(A) rehabilitation or maintenance of facilities previously approved by the commission for funding and owned by the district if the scope of the originally approved project has not changed;

(B) engineering and construction costs associated with constructing water plant or wastewater treatment plant improvements located on the plant site, including storage facilities to meet project needs within the district's boundaries;

(C) pump stations and force mains located within the boundaries of the district which directly connect the districts wastewater system to a regional plant; or

(D) alternate water supply interconnects between two or more districts.

(4) Districts contemplating the use of surplus funds as provided in paragraph (3) of this subsection must:

(A) receive all required approvals of associated plans and specifications from other governmental agencies, including the agency, prior to construction;

(B) submit to the executive director and the appropriate field office those documents required by §293.62 of this title (relating to Construction Related Documents To Be Submitted to the Agency); and

(C) report expenditures of all surplus funds in their annual audit report in the notes to the financial statements disclosing any amounts transferred among the funds including the use of surplus funds and the authority for such transfers.

(d) A district may transfer surplus interest earnings on invested bond proceeds to its debt service account without executive director approval if permitted by its bond covenants and if such funds are not committed for other purposes.

Source Note: The provisions of this §293.83 adopted to be effective September 5, 1986, 11 TexReg 3745; amended to be effective June 30, 1993, 18 TexReg 3758; amended to be effective April 15, 1994, 19 TexReg 2301; amended to be effective October 22, 1996, 21 TexReg 9905; amended to be effective June 5, 1998, 23 TexReg 5715; amended to be effective May 5, 2005, 30 TexReg 2533