Aqua Texas files suit against Hays County groundwater district

HAYS COUNTY — Aqua Texas, a water utility company that services customers in Hays County, filed a federal lawsuit in December 2023 against the Hays Trinity Groundwater Conservation District (HTGCD).

This comes after the district fined the company approximately $450,000 last spring for pumping nearly twice the amount of water it was allowed to in 2022 out of the Trinity Aquifer that feeds Jacob’s Well and Blue Hole Regional Park — two areas that have experienced diminishing and record-low water levels.

According to HTGCD, Aqua Texas is “currently in breach of its local groundwater permit for a variety of violations including failure to adhere to its approved Drought Management Plan, overproduction of groundwater and failure to maintain its water supply infrastructure as required by district rules.”

The district stated that the company overproduced its annual allotment by more than 89 million gallons of water in 2022 — nearly double the amount that its permit allowed — and its systems lost as much as 32% of its water due to “poorly maintained water pipe infrastructure.

The district issued Aqua Texas a rate of $5 per thousand gallons produced with a May 2023 deadline, but the company did not pay.

Negotiations between Aqua Texas and the district have been ongoing ever since.

In the lawsuit, the company claimed that HTGCD is not providing “continuous and adequate water service to its customers.” However, according to HTGCD General Manager Charlie Flatten, the district has not threatened Aqua Texas’ customers’ access to water.

Another claim in the lawsuit is that the district has assessed an illegal production fee.

“The district offered a settlement agreement that reflects Aqua’s enormous overproduction, largely due to Aqua Texas’ failure to fix leaking infrastructure and seeks to incentivize adherence to Aqua Texas’ drought conservation guidelines and to bring its infrastructure to industry standards,” Flatten responded.

Aqua Texas also accused the district of “unlawful and unequal treatment” and stated that the fine was targeted specifically toward the company, as the district has forgiven similar water utilities for their penalties.

“While other Hays County utilities and well operators were allowed to apply their own conservation and infrastructure investments for penalty forgiveness, the district refused to extend the same treatment to Aqua, opting instead to use the contested fine as justification for further illegal hardships,” said Paul Terill, Aqua Texas’ legal counsel for this issue. “The district did not apply the same penalty settlement policy to Aqua Texas that it applied to all the others, including lesser fines and complete forgiveness of all penalties by factoring in past and future investments in conservation efforts.”

Aqua Texas has done the following, as well as additional steps, to promote conservation, protect groundwater resources in the district and reduce groundwater production inside the Jacob’s Well Groundwater Management Zone (JWGMZ), according to the lawsuit:

• Spent $2 million for the purchase of the land and an additional $220,968 for drilling and testing two new wells to relieve pumping pressure on Jacob’s Well

• Spent approximately $85,000 on equipment leasing, aquifer testing and groundwater consulting services for a study and to evaluate any potential impact of Aqua Texas’ new wells outside of the JWGMZ and Jacob’s Well, along with groundwater levels

• Located and replaced water distribution lines

• Spent $37,500 on a study to help identify line leaks in areas served by wells

• Aqua Texas will spend more than $4 million for water line replacement in the Woodcreek area

• Sent brochures to customers containing outdoor water conservation measures

• Initiated a social media campaign to raise drought awareness and provide practical water conservation tips

In his response to this claim, Flatten said that the district regularly considers reductions in settlement amounts for improvements that increase groundwater conservation and expenses to repair broken pipes from extraordinary freezes, for example.

However, Flatten contested that the district unfairly denied Aqua Texas’ opportunity for violation forgiveness. It’s unclear if Aqua Texas’ infrastructure improvements would be considered as conservation efforts or regular maintenance.

“The Aqua Texas settlement process is ongoing, and no determination has been made whether its infrastructure expenditures qualify as conservation improvements,” Flatten said. “Out of the ordinary weather-related line failures or expenditures, that would qualify as regular maintenance and operational costs.”

He added that receipts for purchase or construction of conservation activity submitted for forgiveness consideration must be dated within the year that the violation occurred. Normally, the HGTCD Board of Directors considers these at a meeting in the first six months of the following year (i.e. 2022 violations were heard in mid-2023). Aqua Texas requested that no hearing be scheduled while negotiations are ongoing, according to Flatten.

While Aqua Texas drilled two new wells as an attempt to relieve pressure on Jacob’s Well, the district adopted a well permitting moratorium: “The district did not inform Aqua Texas of the permitting moratorium, nor did it make any provision for the fact that Aqua Texas had already drilled the new wells,” said Terill. “Aqua discovered the proposed moratorium after being made aware of a public notice.”

Flatten explained that district rule prohibits new permits, permit amendments and non-exempt wells during Critical and Emergency Drought stages. But variances are available to protect public safety, such as for emergency services.

The goal of the lawsuit is to ensure fair and lawful treatment and fair recognition of the time, money and effort that Aqua Texas has spent and will continue to spend to protect Jacob’s Well and ensure safe drinking water for its 3,000 customers, Terill said.