Jan. 18, 2012

LCRA and West Travis County Public Utility Agency sign major sales agreement

LCRA and the West Travis County Public Utility Agency signed a sales agreement Tuesday that allows the PUA to take ownership of the West Travis County Regional Water and Wastewater systems.

The signing ceremony, attended by a number of local and state officials, ends more than a year of work 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.

LCRA and the West Travis County Public Utility Agency signed a major sales agreement Tuesday transferring ownership of the West Travis County Regional Water and Wastewater systems to the utility agency. Shown are: (left to right): Leander Mayor John Cowman, Bee Cave Mayor Caroline Murphy, Rollingwood Mayor William C. Hamilton, West Lake Hills Mayor Dave Claunch, Sunrise Beach Village Mayor Pat Frain, LCRA Chair Timothy Timmerman, State Sen. Kirk Watson, Coalition of Central Texas Utilities Development Corporation President Pix Howell, LCRA General Manager Becky Motal, West Travis County MUD No. 3 President Robert Salgo, Hays County Commissioner Precinct 4 Ray Whisenant, West Travis County Public Utility Agency Chair Larry Fox, Bastrop County WCID No. 2 Director John Creamer and West Lake Hills Wastewater Commission Chair Steve Hudson.

State Sen. Kirk Watson, of Austin, who was instrumental in bringing the two sides together, said the public is the "big winner" in the agreement.

"That's what happens when public entities that have the public interest at heart get together and are willing to work hard, willing to try to set aside differences and be creative," Watson said during the ceremony at LCRA's Redbud Center. "This is, in my opinion, a great example of that."

Under the agreement, LCRA will transfer system operations and the ability to set rates to the PUA as early as March 19. The PUA was formed by and includes representatives of the City of Bee Cave, West Travis County MUD No. 5 and Hays County. Also during today's ceremony, LCRA, the City of Bee Cave and West Travis County Municipal Utility District Nos. 3 and 5 signed a settlement agreement for dismissal of the appeal of LCRA's rates for the West Travis County Water and Wastewater Systems.

Tuesday's agreement is a major step toward the divestiture of LCRA's water and wastewater utilities. LCRA's Board of Directors voted to seek buyers for the utilities in November 2010 and set criteria for choosing a buyer or buyers that included:

• 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.

LCRA Board Chair Timothy Timmerman attributed the success to the hard work and persistence of Watson, Sunrise Beach Village Mayor Pat Frain, Coalition of Central Texas Utilities Development Corporation President Pix Howell and other members of the Coalition. LCRA and the Coalition originally negotiated the sale before handing it off to the newly formed PUA.

"This is a great example of how sometimes even diverse needs can realize a common success," Howell said.

Timmerman agreed.

"Today's ceremony represents the cooperation and efforts of people throughout the region," Timmerman said. "LCRA has run a thorough and fair process over the last year to find the best buyers for these systems. I'm happy to say that after a long and sometimes rocky road, we are finally here."

Since the Board’s vote in November 2010, LCRA has also worked to sell off systems individually in cases where negotiations were already in progress. Those sales have closed recently or are preparing to close soon:

• Sunrise Beach Water System – sale closed in December with the City of Sunrise Beach.
• Leander/Sandy Creek Water Treatment Plant – sale closed Jan. 5 with the City of Leander.
• Whitewater Springs Water System – completed the purchase agreement with the Whitewater Springs Water Supply Corporation and tentatively plan to close in April.
• Lakeway Raw Water Transport System – completed the purchase agreement and expect to close by early February with Lakeway and Hurst Creek municipal utility districts, Rough Hollow South Community, Inc., and Travis County Municipal Utility District No. 11.
• Liberty Hill Wastewater System – completed the purchase agreement with the City of Liberty Hill and expect to close in March.
• Glenlake Water System – completed the purchase agreement and plan to close with the City of Austin on March 28.
• South Road and Hamilton Creek Water Systems – transferred to the City of Marble Falls on Jan. 17.

LCRA is negotiating with Corix on purchase and operating agreements for the 12 Hill Country and six Southeast systems. The deadline to complete those agreements is Feb. 21.