What is a Water Control and Improvement District and How Do They Work?
DURATION 3 minute read
Every community needs access to clean water. While some rely on water from the city, some communities get it from a different source like a water control & improvement district (WCID).
A WCID is a special district that provides water, wastewater and drainage services to a specified area. From developers and engineers to city leaders and Texas communities, a WCID is a great alternative financing tool for community utilities, so it’s important to understand their powers and how they operate.
What is a WCID?
A WCID is a limited, independent government with the authority to purchase, construct and maintain the necessary infrastructure to provide water, wastewater and drainage services to an area. Though services can vary from district to district, many WCIDs operate sanitary sewer systems, provide irrigation and other water quality and drainage related services.
WCIDs typically serve an underdeveloped area with an existing water facility in an area in need of water services. In an area with an existing water facility, residents and developers have the power to petition for the creation of a WCID that can purchase the facility, though it must be signed by a majority of the landowners in the proposed district.
Who Governs WCIDs?
Once the petition to create a WCID passes through the review process, a temporary board is usually appointed by the TCEQ until an election. But once election season rolls around, residents within the bounds of a WCID can run for a seat on the board – though they are required to meet certain qualifications established by the Texas Commission on Environmental Quality (TCEQ).
The five-member board is responsible for a WCID’s daily operations, though it’s subject to supervision from the TCEQ. The board is responsible for the business of the district, including working with contractors, managing finances, and the district’s purchasing needs. WCID’s also have the power to charge for water services and adopt rules that address water distribution, water conservation and the safety and sanitation of sewer systems.
How Does a WCID Obtain Funding?
Water control & improvement districts have broad authority to supply and store water for domestic, commercial and industrial use, operate sanitary sewer systems, and provide irrigation, drainage, and water quality services. The powers and duties of a WCID are determined by general law when the district is formed, so they can vary from district to district. However, the greatest authority of the district is the power to issue bonds and other forms of debt to finance the construction, purchase or maintenance of water, wastewater and drainage projects and services. WCIDs can also enter contracts, obtain easements, and exercise eminent domain.
Sometimes these debts are secured by tax revenues, which the Texas Constitution requires to be approved by district voters and the TCEQ. With voter approval, WCIDs can also seek to issue an unlimited tax bond which includes an unlimited debt-service tax that is used to pay off the bond. Once these bonds are issued, a WCID is required to levy an annual property tax sufficient to cover the district’s outstanding debts.
You can visit the TCEQ’s website for more in-depth information on the powers and duties of a WCID.
WCID vs. MUD
A WCID and a municipal utility district (MUD) are two of the most common types of water districts in Texas and are strikingly similar in how they are operated and financed. For one, both districts are overseen by the TCEQ and governed by a board of directors elected by district residents.
Though both a MUD and WCID can incur debts and levy taxes, they differ in the types of projects they can finance. MUDs, for example, can only finance the construction of non-existent water and sanitary sewer facilities while WCIDs have the authority to purchase existing water facilities. MUDs can also finance the construction of new roadways while a WCID cannot.
WCIDs and other special districts like MUDs, PIDs and TIRZs are great alternative financing methods. They aid in economic development for cities and can be a tool for developers to provide infrastructure for their communities.
From compliance to infrastructure updates, our team can help you bring quality water services to your community. Visit our Districts & Authorities page to learn more about our work with special districts or consult with our special district experts.