By Andy Sevilla.
Hays County’s attempt to secure a water supply contract with Forestar Real Estate Group has run into a legal roadblock, in addition to the fact that Forestar cannot presently provide the amount of water promised in the agreement.
Last October, county officials contracted with Forestar to provide 45,000 acre-feet of water annually from the Lost Pines Conservation District. However, Forestar did not have the permit in place and the district rejected their request amount and only granted them 12,000 acre-feet.
Now, Forestar and the county are grappling with legal questions surrounding their agreement.
Hays County put its first-year $1 million payment to Forestar in an escrow account, pending an attorney general opinion on county authority when dealing with water issues.
The county’s attorney said March 31 that the local government was seeking an answer on whether they could enter into a five-year contract with Forestar for the 45,000 acre-feet of water from the Carrizo-Wilcox Aquifer at a reservation cost of about $1 million or $22.22 per acre-foot.
County attorney Mark Kennedy said counties are required to rely on expressed and implied authority, and the counsel’s office felt state water code revisions offer significant implied authority. However, in dealing with multi-year, multi-million dollar contracts, Kennedy advised to seek as much granted authority as possible.
Officials requested an opinion on numerous matters including, purchasing, transferring, assigning and paying for groundwater. That opinion, if affirmative, would have released the $1 million payment to Forestar, per the agreement.
The attorney general’s office, however, declined opining on the matter, citing an inability to interpret a contract, Kennedy told a room full of Hays, Travis and Williamson county representatives meeting to discuss future water needs.
“We were very careful to stay away from the contract question,” he said. “We had to include reference to it, of course, since we had one. And we wanted to show, by attaching (the contract) as an exhibit, that one existed and if they cared to take a look at it to help color the question.”
“Instead of still answering what I consider to be a pure legal question – interpretation of the statutory provisions – they pointed at the contract and said ‘we can’t comment on this,’” Kennedy said.
Since the contract calls for the affirmative opinion by the attorney general’s office – allowing the county to purchase, sell, transfer, assign and pay for groundwater, among other things – officials now say the agreement is in need of amendments.
Payments to Forestar were to begin on the date the county received that affirmative opinion.
“So we don’t have an affirmative opinion date, we have the punted opinion date,” Kennedy said.
In January, the conservation district rejected a permit request by Forestar seeking 45,000 acre-feet of water annually, which the real estate group would then sell to Hays County.
The district only approved 12,000 acre-feet of water. An acre-foot of water is the amount of water it would take to fill an acre with water at a one-foot depth.
Forestar recently appealed the conservation district’s denial of an additional 33,000 acre-feet of water in Lee County, Kennedy said, but Hays County is not involved in the suit.
County officials are looking to either join the Lone Star Regional Water Authority, or create a Utility Development Corporation–along with Travis and Williamson counties–to help move water Hays County may have access to from the aquifer under Lee and Bastrop counties.
Hays County commissioners have said moving the water would be too costly for one government to do on its own, and is looking for partnerships to address regional water needs.
The three counties’ elected officials will meet April 14 in Round Rock to discuss future water needs and a potential partnership.
