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LCRA board delays decision on sale of water utilities

Thursday, August 25, 2011 by Michael Kanin

It will be at least another month before the Board of Directors of the Lower Colorado River Authority makes its decision about who will purchase its water and wastewater utilities.


That news came on a tabling motion by Director Scott Spears after the board took public comment and discussed the matter in executive session. As part of the motion, Spears directed staff to work with the consultant hired by the LCRA, a coalition of public entities hoping to take control of their respective water systems, and some of those individual systems to discuss their bids. He added that staff and the consultant, Toronto-based BMO, should “further explore possible improvements to the bid of Corix Infrastructure and other bidders for the balance of the system.”


On Tuesday, BMO recommended that the LCRA sell the bulk of its water utilities to Vancouver-based Corix. Representatives from the firm also suggested that the agency sell four of its utilities – those in Lakeway, Glenlake, Whitewater Springs, and Sandy Creek to individual municipal utilities.


The coalition Spears referred to has made a very vocal – and very public – push to acquire the systems. Familiar faces from that campaign returned to the LCRA’s board room Wednesday morning to once again make their case.


West Lake Hills Mayor Dave Claunch pulled no punches. “I’m deeply disturbed by staff’s recommendation to sell to Corix,” he told the board. “I’ve been suspicious of this whole divestiture process since it was announced last year. Many of us affected by this deal speculated that the fix was in from the very start.”


Claunch continued to suggest that, should Corix end up with the utilities, there would be legal consequences. “When you go into executive session to deliberate on this decision, I hope you will ask some very important questions. Ask about the injunctions, the breach of contract disputes, the claims for damages, and takings and other legal jackpots that lie just over the horizon for LCRA, BMO, and Corix,” he said.


Hays County Pct. 4 Commissioner Ray Whisenant was no less dramatic. “I think this really does become, in my opinion…a Texas question,” he said. “I’d just like to remind everybody that I think it would be a good time to remember a group of people, 175 years ago who spent 13 days defining what it meant to be a Texan.”


Former LCRA Board Member Pix Howell has been something of a front man for the coalition. He told the board that he was “still optimistic that you intend to look at options rather than a pure acceptance of… (the) BMO recommendation.”


Coalition members contend that, should the utilities fall into the hands of an investor-owned entity, their rates could rise by as much as three times what currently appears on their bills. They’ve also suggested that the group’s bid would not be as high as that of a private firm.


The LCRA has released no bid information. Two bids from West Lake Hills for that city’s LCRA-owned water system made before the organization formally announced the sale of the utilities were rejected. Those figures were for roughly $16 and $17 million. A subsequent independent appraisal contracted for by West Lake Hills valued the system at roughly $8 million.


West Lake Hills’ utility is one of nearly 30 still owned by the LCRA.


According to its web site, Corix is an “an integrated provider of essential utility infrastructure.” It boasts a host of services in the energy, water, wastewater, construction, and municipal services sectors. The company also sells water and wastewater equipment.

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