Page 199 - Ord 866 Adopting a revised Fiscal Year 17-18 and new proposed Fiscal Year 18-19 budget

Section 4 Enterprise Funds
Utility Fund Overview

The Utility Fund is burdened with three outstanding long-term obligations.

The long-term liability of the loan from Hillwood to the Town to construct 16” and 20” transmission
water lines and the US 377 Pump Station.
o The Town is contractually obligated to pay for this infrastructure through a surcharge on
water rates. The Town is divided into two service areas, one being the Circle T Ranch,
and the remaining areas within the Town’ s limits which constitute the “ Town” service
area. The Town pays Hillwood $. 25 cents per 1,000 gallons of water distributed to
consumers in these two service areas. Each service area pays its respective portion of
the overall debt based on the volume of water used.
o The contract clearly stipulates that this debt is not a general obligation of the Town. It is,
however, required to be paid back through this assessment being attached to the
water rate. The rate would have to be significantly increased to pay this debt off in the
twenty years contemplated under the agreement.
o Hillwood has stated that once the Town and Hillwood agree on proportionate future
infrastructure funding, this liability will be erased. Nevertheless, the obligation does exist
and water rates should always be reviewed with this obligation in mind.

The long-term liability of the joint Westlake/ Keller water tower.
o This tower was constructed to provide necessary water storage and pressures within
Westlake.

The proportionate buyout of infrastructure owned by the Hunt Trust which sold the Circle T Ranch
to Hillwood.
o The Town agreed with Hillwood that in exchange for the dissolution of existing Municipal
Utility Districts ( MUDs), the Utility Fund will reimburse Hillwood the share of purchased MUD
infrastructure for each development based upon the acres removed from the MUDs.
o Hillwood, in turn, must deposit these funds into an escrow account owned by the Hunt
Trust.

185