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LCRA consultant recommends Canadian firm for water utility purchase

Wednesday, August 24, 2011 by Michael Kanin

The consultant hired to advise the Lower Colorado River Authority on the sale of its water and wastewater utilities recommended that the bulk of those facilities be sold to Vancouver-based management firm Corix. But the group also suggested that four of the utilities under consideration – the Lakeway Raw Water Barge, the Sandy Creek Regional Water System, the Glenlake Water System, and the Whitewater Springs Water Systembe sold singly to public entities.


Under the recommendations, the Austin Water Utility would be in line to purchase the Glenlake system. According to the LCRA, those facilities are part of the infrastructure that services the River Place Municipal Utility District. It serves about 980 people.


The recommendation goes against the hopes of a consortium of public entities that aimed to acquire the utilities. Former LCRA Board Member Pix Howell spoke on behalf of the group.


“It was predictable,” he told In Fact Daily. “I knew that (the consultants) would recommend a higher dollar amount—obviously their fee is, to a certain degree, based on how much LCRA collects on this.”


Members of the consortium have indicated that they don’t believe that their bid is a high as some of the private firms involved in the auction.


The action came as part of a presentation made by the consultant, Toronto-based BMO, to the LCRA’s Water Operations Committee. During testimony there, Howell seemed to imply that the consortium wouldn’t rest, should the LCRA decide to award its utilities to a private firm.


“From the very beginning the (coalition) was put together not just as a bidding entity but one that would take action if it turned out that the private sector ended up with these systems,” he said. “We’ll continue the fight, so to speak.”


He declined to elaborate, pending the LCRA Board’s ultimate decision.


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.


Consortium members are concerned that a private firm would raise rates significantly, should it be awarded the utilities.


BMO representatives detailed a process that formally started in February, when it “approached 87 potential interested parties.” Of the initial group, 38 subsequently responded with documents that allowed them to begin collecting information for the bid.


After an 11 week review period, 16 “preliminary bids” were turned in. BMO moved forward with 11. The group received final bids on August 8.


No figures or other bidders were revealed by either BMO or the LCRA. The full LCRA board could take action on the sale this morning at its monthly meeting.


Howell remained optimistic. “I still feel pretty good,” he said when asked about his chances.

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