Alternative Project Delivery - Texas Water Development Board

Section 4
• The company, BexarMet Development Corporation (BMDC), floated tax exempt
bonds using the assets of BexarMet and leases back to BexarMet the facilities
created by the private corporation.
The financial arrangement was developed as follows:
• BexarMet bills its customers and receives payment;
• BexarMet pays BMDC a fee for the lease and operation of the facilities;
• BMDC pays the DBO contractor for operation and construction; and
• BMDC pays the bondholders.
Benefits
• As a direct benefit of the DBO procurement method, the facility was completed
and placed in service less than 16 months from the commencement of the
contract.
• The operation was reported to be effective and resulted in a successful project for
both BexarMet and United Water, the DBO contractor.
Present Status
The facility remains in operation.
Houston, Texas
The City of Houston ("City") provides water on a retail basis to residents within the
City’s jurisdictional boundaries. The City currently operates its water utilities through
the City Department of Public Works.
Background
To develop new water supplies and to reduce dependence on groundwater sources, the
City is in the process of developing a 60-MGD surface water treatment plant and
transmission system. The water plant, which will draw water from Lake Houston, was
a response to the need for surface water supplies in northeast Houston. The City also
envisions selling water from the new plant to municipal utility districts in northeast
Harris County. The City intends to procure the design, construction and operation of
these facilities through the use of DBO project delivery.
On August 23, 2000 the City Council of Houston created the Houston Area Water
Authority to shepherd the development of a northeast water plant. The Authority
allows the City to use DBO for project delivery and permit the City to act as a private
company while retaining the financial advantages of a public entity.
The City Council retains approval authority over several major steps in the
development of the water plant. The board of the local government corporation will be
4-2 Texas Water Development Board B1381-Sect4