CITY OF GALVESTON
JULY 2013
GALVESTON PAST
GALVESTON FIRSTS
Galveston is the site of
many “FIRSTS” in the State
of Texas which includes:
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First Naval Base (1836)
First Military Company
(1841)
First Roman Catholic
Convent (1847)
First Railroad Locomotive
(1852)
First Private Bank (1854)
First Real Estate Firm
(1857)
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First Post Office (1836)
First Chapter of the Masonic Order (1840)
First Law Firm west of the Mississippi River (1846)
First Grocery Store (1851)
First Use of Telegraph (1854)
First Gas Lights (1856)
First Trade Union (1866)
First Cotton Exchange (1872)
First Electric Lights (1883)
First Drug Store (1867)- still in business
First Orphanage (1876)
First Medical College (1886)
First Golf Course (1898)
First Bakery (1838)
First Cotton Compress (1842)
First Cathedral (1847)
First Insurance Company (1854)
First Jewelry Store (1856)
First Hospital (1866)
First Opera House (1871)
First Telephone (1878)
First School for Nurses (1890)
First Country Club (1898)
A New Beginning
Since the founding of Galveston in 1839, the city has led with distinction and
honor. The greatness of Galveston is the pride it takes in itself and it’s willingness
to step forward when the need is great and the options few. The time is here and
the need is now to take charge of Galveston’s destiny, making Galveston great
once again.
• Galveston as the choice for business and education, fostering
entrepreneurship, R&D facilitated by Universities and job growth
• Galveston as a modern well equipped US port, insuring it’s
competiveness into the future
• Galveston as the place to live, work and play, for young and old with a
convenient and affordable lifestyle
• Galveston as the place for visitors, with entertainment, dinning and
accommodations to rival the best worldwide
• Galveston as the city leading the way, with public services like health
care, security, environmental and self sufficiency, including storm
protection and 24 hour response
A New Beginning
Galveston - Opportunity
Galveston must decide it’s future by examining it’s needs and it’s resources, then
formulating a comprehensive business plan
• The City should utilize it’s natural and physical resources, as part of a
coordinated plan to create an investment friendly environment
• Establish a long term holistic plan to become self sufficient
• Develop a system to attract private capital, for present and future stability
• Institute a self-sustaining resource for water, sewer and power, thereby creating
a mechanism to finance growth without taxing inhabitants and businesses
• Make Galveston a dynamic, forward thinking business friendly Community
Aerial Photo of Fujairah Desalination and Cogeneration plant.
Forecasted Potable Water and Export Power Revenue and Net Income
• Combined Net Revenue
$ 642,400,000
• Combined Net Income
$ 189,360,539
Category
Desalination
Water Production
Power
224,028
Power Production
1,500
$
Cost of Construction* 1,200,000,000
Annual Revenue
Total
Description
224,028
Acre feet
1,500
Megawatts
$ 2,000,000,000 $ 3,200,000,000
USD
642,400,000
USD
Debt Service
$ 182,500,000 $ 459,900,000 $
$
68,602,298
$ 114,337,163 $
182,939,461
USD
O&M Cost
$
73,000,000 $
197,100,000 $
270,100,000
USD
$
40,897,702 $
148,462,837 $
189,360,539
USD
Net Income
*Includes all rail, bridges, roads, support and storm infrastructure on Galveston and Pelican Island
Proposed First Phase
Develop and refurbish Port and Add Island Protection
New Cruise Ship Slips and Terminals
Revitalize Historic District
Revitalize Mixed Use
Possible expansion with Port of Houston
Dredge Spoils
Desalination and Cogeneration
Investment at Texas A&M and Add Island Protecion
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Rail and Vehicle Bridges and rail expansion on Pelican Island
Galveston and Pelican Island Phase 1
Galveston / Pelican Island Improvements and additions, including Rail and Vehicular
Bridge with Desalination and Cogeneration Plant at a total investment of $ 4 billion
Infrastructure Improvements and Additions
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Building an Industrial Rail and Vehicle Bridge
Pelican Island Rail Expansion
Desalination and Cogeneration
Expand Galveston and Pelican Island Storm Protection
Create Galveston Island Self Sufficiency with Water, Sewer and Power
Galveston Improvements and Additions
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$ 3.2 Billion
Revitalize Historic District
New Ship Slips and Terminals
Investment in Downtown, Texas A&M and UTMB
Develop and Refurbish Port on Pelican Island
$ 800 Million
Projected Increase in Water Spending for Region H
Area H will spend $3.88 Billion in 2013 and $11.46 Billion in 2060 for
Water.
Projected Spending on Water for Region H
$14.00
Billions of Dollars
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
2013
2060
Assuming a price of $5 per thousand gallon in 2013 and an inflation rate of 1.5% . Water Rates - $5.00 per Thousand Gallon Gross:
https://www.houstonwaterbills.houstontx.gov/SpecialMessages/Rates2012.pdf
Desalination Production to Galveston and Region H
Desalination / Cogeneration Site
Potable Water Production
Water Production
Revenue per 1,000 Gallons
Revenue per Day
Revenue
200,000,000
$
2.50
$
500,000
$ 182,500,000
Gallons per day
Price per thousand gallons
Revenue per day
Revenue per year
O&M Cost per 1,000 Gallons
Daily O&M Cost
Total O&M Cost
$
1.00
$
200,000
$ (73,000,000)
Cost per thousand gallon
Incremental cost of production
O&M Cost per year
Debt Service
NET INCOME
$ (68,602, 298)
$
40,897,702
Per year
Export Power Production to Galveston, the Grid and Region H
Desalination / Cogeneration Site
Export Power Production
Power Production in Megawatts
Kilowatt Hours Conversion
Kilowatt Hours per day
Price per Kilowatt
Revenue Per day
Revenue Per Year
$
$
$
1,500
1,000
36,000,000
0.035
1,260,000
459,900,000
O&M Cost Per Kilowatt
Kilowatt Hours per day
Total OM Cost
$
$
0.015
36,000,000
197,100,000
Revenue
Less Debt Service
Less O&M Costs
Net Income
$
$
$
$
459,900,000
(114,337,163)
(197,100,000)
148,462,837
Jobs and Opportunities
Jobs, Training and Retraining
Up to 100,000 permanent jobs created
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The construction job creation in developing $4 billion of infrastructure over 7 years is
significant
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The workforce in supporting that development is generally equal to the direct jobs
created
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The long term jobs created are approximately 67,000 to 100,000 according to the
Milken Institute, IMPLAN and ARRA
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The training and retraining of trades and the curriculum adjustments for education
this plan requires will prove to be a positive for Galveston and surrounding
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University involvement with project details and the R&D that could be advanced and
implemented will to be prove of significant import
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Long term jobs will be associated with the future of Biomass/Biofuels/Biotech and
the process’ and products derived along with export and logistics
Desalination and Cogeneration Facts
Desalination and Cogeneration have existed since the 1800’s and the size and scope
are ever expanding while construction and operating costs are coming down
• Desalination has been used for thousands of years - Greek sailors boiled water to
evaporate fresh water away from the salt and Romans used clay filters to trap
salt.
• Today’s sophisticated methods still generally use the concepts of distillation or
filtration.
• There are about 15,000 desalination plants around the world. The biggest plants
are generally in areas with few fresh water resources or with large populations by
seas and oceans, such as the Orient / Middle East, Asia / Asia Pacific, Asia Minor,
Australia / New Zealand and North Africa / Africa.
• The largest Desalination and Cogeneration plants are presently in Saudi Arabia,
the UAE, Israel, and India
Desalination and Cogeneration Facts
Lower Operating Cost and Additional Revenues from Export Power are the
Purpose and Design of Desalination and Cogeneration in Tandem
• Desalination with Cogeneration systems—also called combined heat and
power (CHP) systems are designed to generate both heat and power
• The thermal energy can be used to generate heated water and steam
production as well as for various types of process heat.
• Reduces or eliminates transportation and distribution costs of fuel source or
power source. Addition of boiler system or other heat storage medium further
increases operating time and efficiency.
• Thermal energy can be used to generate heating water and steam production,
as well as for various types of process heat.
Comparable Desalination and Cogeneration Plants
City
Country
Water Production Power Capacity
(MGD) per day
(MW)
Ras Azzour1
Saudi Arabia
273
1,100
Jubal II Industrial Zone
Rabigh2
Saudi Arabia
Saudi Arabia
232
158
2,750
1,813
Shoaiba
Saudi Arabia
108
5,600
Fujairah Water and Power Plant
United Arab Emirates
130
660
Umm Al Nar
United Arab Emirates
114
1,550
United States
50
NA
Point Lisas
Trinidad
48
NA
London
Chennai
England
India
40
26
NA
NA
Carlsbad, California3
1 - Estimated Completion 2015: 2- Estimated Completion 2018: 3 - Estimated Completion 2016
Implementation
Implementation Plan
• Create a non taxing Infrastructure Authority
• Establish Board Members and governance, including State of Texas
• Engage professional services; bankers, accountants, legal
• Authority raises initial tranche of capital for Business Plan development and
pre-construction planning
• Engage additional professionals; engineers, architects, specialists
• Institute business plan and construction programming for phase 1
• Authority coordinates with relevant local, state and federal entities, including
water, power, transportation, port, EPA, Corps of Engineers, etal.
• Authority negotiates and finalizes Purchase Agreements for Water and Power
• Authority devises and markets financial instrument via underwriters for Phase
1 capital requirements
Next Steps
• Give the city manger and the city attorney the permission
to work with Arthur Val Perkins of the firm Gardere Wynne
Sewell.
• Create a non taxing Infrastructure Authority and bring it
back to the city council in 30 days for consideration.
Implementation
If we fail to take advantage of this once-in-a-century
opportunity, future generations will look back at us with a
mix of disgust and anger. They will wonder how we let such a
golden opportunity slip by and will think o us as “the idiot
generation” And you know what? They will be right.
“Rising Interest Rates Will Soon Make Needed Infrastructure Repairs More Costly”
Barry Ritholtz
Washington Post July 12, 2013