by SEAN BATURA
If the Lower Colorado River Authority board of directors takes a recommendation from its staff, Hays County and other central Texas governments and water suppliers will be out of the running to purchase the authority’s water and wastewater systems, including one that serves residents in northern Hays County.
LCRA staff and financial consultant Bank of Montreal Capital Markets recommended that the board offer about 24 of the authority’s remaining water/wastewater utilities to Vancouver, B.C.-based Corix.
LCRA’s board of directors will meet today to decide whether to enter negotiations with Corix, a company which appears to be involved in a variety of water and wastewater-related industries ranging from selling supplies such as pipe and meters to owning Fairbanks (Alaska) Water & Sewer. The Coalition of Central Texas Utilities Development Corporation, of which Hays County is a member, was among the competing bidders for LCRA’s remaining water/wastewater utilities.
Pix Howell, board president of the utilities development corporation, addressed the LCRA Water Operations Committee after staff recommended Corix.
“We’re still committed to this,” Howell said to the committee at the meeting in Austin. “One way or the other, we’re going to stay in. We have some damages that we will be moving forward with if we aren’t satisfied with how this turns out. And I sure hope that as you consider this, you’ll take all those things into consideration.”
LCRA board member Scott Spears, who chairs the water committee, declined to comment on Howell’s warning after the meeting.
Hays County Judge Bert Cobb, responding to the LCRA’s staff recommendation on Tuesday, said this recent development should serve as “a clarion call” to warn county residents their water supply is “tenuous,” and spoke of the need to seek other sources of water.
Last week, Hays County commissioners unanimously approved a letter of intent to buy 25,000 to 45,000 acre-feet of groundwater each year for 50 years from a private company that plans to pump from the Simsboro formation of the Carrizo-Wilcox Aquifer to the east.
Cobb said water and water/sewer infrastructure should be controlled by public entities, lest customers face lower-quality service and expensive rates. Other members of the commissioners court have echoed this concern. Cobb said a private corporation will inevitably increase rates on users.
“They (a private corporation) aren’t going to lose money — their stockholders are not going to let them,” Cobb said.
Bank of Montreal representatives, in their presentation to the LCRA water committee, said Corix offers an extended period rate plan that avoids dramatic rate increases.
Hays County Pct. 4 Commissioner Ray Whisenant, who represents the county on the utilities development corporation board, declined to comment on the LCRA staff recommendation. Whisenant said he would comment on the matter at the LCRA board meeting today.
LCRA decided in 2008 to divest itself of all water/wastewater utilities and focus on long-range water availability planning. Spears, on Tuesday, said LCRA loses $3 million a year on its water/wastewater systems. Water/wastewater utilities are generally expected to be self-sufficient.
The Utilities Development Corporation was formed by Hays County and the cities of Bee Cave, Leander, West Lake Hills and Sunrise Beach and 17 other entities including the city of Dripping Springs and the Dripping Springs Water Supply Corp.
The water/wastewater systems LCRA offered for sale include the West Travis County Regional Water System, which serves 7,000 residents directly in Hays County and others through water suppliers and utility districts that buy water wholesale. LCRA seeks one buyer for as many of the systems as possible.
BMO representatives, in their presentation, offered six reasons for recommending Corix:
BMO said Corix’s bid presents a high likelihood of covering most of LCRA’s cost to decrease debts it incurred from the utilities, with the least risk;
Corix garnered the highest evaluations among bidders for non-monetary bidder criteria set by LCRA, such as the ability and commitment of a buyer to provide reliable and quality utility services and to meet applicable regulatory requirements;
Corix provides service to more than 220 water and wastewater systems, which serve 650,000 people in North America, including Oklahoma and Alaska;
Corix has recent experience in transitioning utilities from public to private ownership; and
Corix demonstrated a commitment to establish a new headquarters in Austin and approximately double the size of its current Austin area staff of 70 employees.
LCRA staff, on Tuesday, also recommended one system each be sold to two unspecified buyers – one single system to the City of Leander, and one raw water pumping station to Hurst Creek Municipal Utility District, Lakeway MUD, Travis County MUD No. 11 and Lakeway Rough Hollow South Community, Inc.
LCRA officials have said it may take until mid-2013 to complete the sale of all systems.
