San Angelo to Spend Over $50 Million on New Lake Nasworthy Sewer System

SAN ANGELO, TX — When the City of San Angelo floated the idea of replacing and rebuilding the sewer system across Lake Nasworthy and on the southwest side of the lake, the price was $32 million. Inflation, primarily of PVC pipe, has driven the estimates above $50 million.

At the January 3, 2023 Council meeting, following a discussion led by Mayor Brenda Gunter, the governing body approved allowing the City finance to procure certificates of obligation in the amount of $44,300,000 to finance the sewer project.

The current City sewer system at the lake is a haphazard collection of bandaged lift stations and a solitary and unprotected sewer pipe that runs underneath the lake towards the airport. In recent years, the City has disallowed large scale development on the southern side of the lake due to lack of sewer capacity. Spending $50 million will fix that.

In November 2019, the City of San Angelo held a special election to ask voters to approve appropriating the majority of the Lake Nasworthy Trust Fund to the sewer project. The Trust Fund contains monies collected from lakeside land owners who purchased their previously rented lots. Currently, the balance of the Trust Fund is just over $9 million of the original $11.5 million. The City has already spent $2.5 million on engineering for the sewer project. An additional $4 million from the Trust Fund will be allocated to the sewer project, bringing the estimated total capital cost to $50,800,000.

Mayor Gunter expressed her concern that the $51 million will not be enough. Tom Thompson echoed the mayor’s concerns.

“Will there be any increases in expenses?” The mayor pointedly asked Public Works Director Shane Kelton.

Kelton assured the council and the mayor that at least a 10 percent contingency is built into the cost estimates and added that the City will lock in the price. Requests for Proposals are due January 31, he said.

“My concern (remains) the cost of the project. This was a $32 million-ish project. This is a huge amount over what was projected,” the mayor pressed. Councilman Tom Thompson agreed, “I have never seen a project that hasn’t gone over and into the contingency amount.”

Kelton reassured the mayor and council that he will have inspectors look over every aspect of the construction contract and its line item expenses.

Gunter’s reasoning for approving the large expense project was two-fold. First, she said the project protects Lake Nasworthy. The naked sewer pipe currently there could fail. The proposed pipeline will have shielding and redundancy. Second, Gunter said the sewer project will open up the south side of Lake Nasworthy to building development. It is more than housing the mayor is eying; commercial development at San Angelo’s Mathis Field Airport depends upon the sewer system upgrade. There has also been talk of hotel or resort property development along the lake.

Councilman Tommy Hiebert was more pragmatic about the benefits. He said he had learned of several businesses that had to close down or move because of obnoxious methane gas smells caused by the outdated, band-aided sewer system.

The bottom line, Gunter said, was that the new sewer system was “necessary for the protection of Lake Nasworthy via redundancy and the economic development (opportunities). However, this is still a shocking number!”

There was no public comment about the City embarking upon a $51 million project. With that, with Hiebert making the motion to approve the City procuring the $44,300,000 financing and Councilwoman Karen Hesse-Smith seconding the motion, the council voted 7-0 to commence with the funding of the sewer project that is expected to take about two or three years to complete.

City Finance Director Tina Dierschke said the City is looking at an annual interest rate of about 4.52 percent on a 25-year term for the certificates of obligation. The financing will be backed by enterprise funds from the Sewer and Water Utilities accounts and not the City’s general fund. The funding is expected to be approved Feb. 2.

Three years ago, the City of San Angelo produced a video explaining the benefits of the sewer system upgrade: