March 22, 2012

LCRA transfers West Travis County systems to Public Utility Agency

On March 19, LCRA transferred operation of the West Travis County Water and Wastewater systems to the West Travis County Public Utility Agency (PUA). The transfer is a significant milestone in the sale of the systems that LCRA and the PUA agreed to on Jan. 17. The PUA has taken over all responsibility for operating the systems and setting retail rates.

LCRA and the PUA are working to ensure a smooth and effective transition. Questions about services, billing or other issues should be directed to the PUA and its customer services agent, Severn Trent Environmental Services, at (512) 246-0498 or csaus@stes.com. For more information go to wtcpua.org or read the customer letter.

LCRA had been working for more than a year to find the best buyer for the systems that provide drinking water and wastewater service to more than 20,000 people in and around the cities of Bee Cave, Lakeway and Dripping Springs. The transfer took place during a signing at Bee Cave City Hall. The PUA was formed by and includes representatives of the City of Bee Cave, West Travis County MUD No. 5 and Hays County.

At LCRA’s March 21 Board of Director’s meeting, the following updates were provided on other pending system sales:

• Corix Infrastructure Inc. – we expect to have operations and purchase agreements for the 20 systems Corix is purchasing by March 30;
• Rollingwood Wastewater Utility System – a Memorandum of Understanding with the City is signed, and a City election to approve the purchase will be held on May 12; if approved, expect to close the sale with the City of Rollingwood by Aug. 1;
• Liberty Hill Wastewater System – closing with the City of Liberty Hill is scheduled for May 1;
• Glenlake Water System – we expect to close the sale with the City of Austin on March 28;
• Whitewater Springs Water System – we expect to close the sale with the Whitewater Springs Water Supply Corporation once approval for the transfer from the Texas Commission on Environmental Quality has been received.

In November 2010, the LCRA Board directed staff to seek buyers for the systems. At that time, the Board pointed out that a water utility made up of multiple systems does not leverage the strengths of LCRA as a regional infrastructure provider. The Board also stated that current rate revenues from the water and wastewater utility do not cover the full cost of operating the utility and meeting established Board financial policy would require ongoing rate increases. As a result, water utilities are not the best match for LCRA's policies and financial guidelines.

LCRA’s Board set four criteria for choosing buyers:

• Ability and commitment to provide reliable, quality utility services;
• Ability to invest capital for needed infrastructure;
• Commitment to meeting state regulatory requirements; and
• Willingness to compensate LCRA for its investment.