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Water/Wastewater panel backs buyout of Creedmoor-Maha water utility

Tuesday, June 21, 2011 by Elizabeth Pagano

The Water and Wastewater Commission has unanimously recommended approval of an ordinance that would allow the city to take over water retail service of almost 15,000 acres located within the ETJ. The City Council will consider the matter at this week’s meeting.


The city has provided wholesale water service to Creedmoor-Maha Water Supply Corporation since 1965. Creedmoor has its own water certificate of convenience and necessity, currently obtaining water from multiple sources. Though the deal will transfer all of the land within the city’s ETJ to the city’s certificate, existing customers will still receive service from Creedmoor-Maha, until infrastructure that meets city standards has been built.


Under the proposed agreement, the city will continue providing wholesale water retail service, crediting Creedmoor $ 0.09 per 1,000 gallons consumed for up to 40 years, or until the total dollar amount reaches $3.6 million.


“This is a very good deal. We’ve been working on this, and we’re kind of amazed that we could get it,” said Austin Water Utility Director Greg Meszaros.


“As a part of renewing their wholesale agreement, we worked this transaction in,” Meszaros “Instead of direct cash, we are just going to discount the cost of wholesale water to them until they accumulate the value that we both agree that this land has as part of the transfer.”


Meszaros told the board that it was in Austin’s best interest to secure a deal now, before legislation or Creedmoor itself changed.


“There is no guarantee that Creedmoor-Maha stays a sleepy rural water services area. They could go out and strike a deal with a major groundwater provider and transport in millions of gallons of groundwater from another county. The city would be on the outside looking in, as this area is being developed in ways that didn’t compliment the city,” said Meszaros. “You could have a fierce new competitor right in our ETJ, and we felt that it was in our best interest to go through this transaction now, and remove that risk from happening.”


Austin Water Utility’s Bart Jennings pointed out several other concrete reasons to support this deal. The city would have to build much less infrastructure than it would if, for example, annexation took place absent the deal.


Developers and landowners who wish to redevelop will bear the responsibility of connecting to existing city systems. Additionally future customers in the region will connect to the existing South IH 35 water and wastewater project, and help pay off that debt.


The deal will also prevent costly legal battles for developers and residents who wish to opt out of the Creedmoor system.


“For example, the Pilot Knob development spent close to a million dollars to get out. Most land owners don’t have that kind of money to be able to take that kind of fight,” said Jennings. “By having this kind of agreement, we have more of a certainty where we know what is going to happen, in terms of us planning infrastructure, and it gives certainty to the developer.”


Meszaros agreed, “By doing this in one transaction, it brings certainty to our service area and to our ability to plan and develop infrastructure, where if you do it piecemeal, it’s kind of up in the air,” said Meszaros. “For a relatively small amount of money, spread out over a long period of time, that’s not even cash out of our pocket, per se, we put this all to bed in one global way.”

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