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LCRA selling utilities sans West Lake, Rollingwood systems

Thursday, September 22, 2011 by Elizabeth Pagano

With a marked absence of discussion, the Lower Colorado River Authority board on Wednesday moved forward with divesting the agency of its water utilities.


However, the board rejected bids to purchase the West Lake Hills wastewater system, the Rollingwood wastewater system, the Tahitian Village wastewater system and the raw water and wastewater systems serving Windmill Ranch in Bastrop County. Although the LCRA will keep these systems for now, it is not clear what will happen to them in the long run.


The board unanimously approved starting negotiations with several municipalities to execute purchase and sale agreements between now and Oct. 14. They also approved action by the general manager, Becky Motal, to move towards memoranda of understanding with the two private firms currently under consideration for purchase of the bulk of the divested utilities, California Water Group and Corix Infrastructure, Inc. The board said it would approve one of these memoranda on or before Oct. 19.


In this context, an MOU typically contains terms and conditions of a sale. After receiving a recommendation from the LCRA staff, the board is expected to evaluate the MOUs and initiate the process of final sale negotiation with one of the bidders.


Though the board remained taciturn following its executive session, several familiar faces were present to speak their piece about the sale.


Pix Howell, president of the Coalition of Central Texas Utilities Development Corp., addressed the board in advance of the vote. The coalition represents Bee Cave, Leander, Sunrise Beach, Hays County and West Lake Hills.


Howell encouraged the LCRA to follow through on the sale of the systems to local municipalities, but expressed disappointment about the decision to pursue negotiations with the private companies.


“We stand ready to continue to try and acquire systems when those negotiations fall apart,” Howell told In Fact Daily. “We have a meeting Monday and the board will kind of debrief and figure out where we want to approach this from here, but the UDC is still in place and intends to maintain its involvement in this process on behalf of the customers.”


Representatives from Leander were also on hand to thank the board for their decision to continue negotiations with the city for the Sandy Creek Water System.


“Leander is fully committed to owning and operating its own system… Leander is ready,” said Leander Mayor John Cowman. “I want to hear those five words, ‘I will entertain a motion,’ and I look forward to hearing those five words today.”


Those five words also confirmed that the LCRA will continue negotiations with the City of Austin for the Glenlake Water System, Lakeway Barge Participants for the Lakeway Regional Raw Water System, and Whitewater Springs Water Supply Corporation for the Whitewater Springs Water System.


The board declared these systems “no longer necessary or convenient or of beneficial use to the business of LCRA.”


They also rejected bids for the West Lake Hills wastewater system, the Rollingwood wastewater system, the Tahitian Village wastewater system and the raw water and wastewater systems serving Windmill Ranch in Bastrop County. These systems will be excluded from the divestiture process, and retained by LCRA. It is not clear what will happen to those systems in the long run.


Howell was measured in his appreciation of the systems that were not part of the private negotiations.


“It was, I guess an attempt on the part of the LCRA board to sort of be kinder and gentler, but still sell to the most money,” Howell told In Fact Daily. “Obviously it had a lot to do with the influence of the coalition of customers, that we even got this far…By putting the coalition together I think all the customers at least had a chance at this. I don’t think it’s over.”


Jack Touhey, Vice President, Public & Government Affairs, told In Fact Daily that his company was pleased to have gotten this far in the process, and that they looked forward to growing their business in Texas. Corix currently has 70 employees working in Austin, and has been in the area for just over eight years.


“We obtained feedback from the community so we know what’s important, and over the last month we’ve been meeting with organizations and elected officials to find out about their priorities and concerns. We’re very focused on interacting and communicating with the community,” said Touhey.

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