WEST TRAVIS COUNTY PUA History

The West Travis County Regional Water and Wastewater System was created in 2000. The Lower Colorado River Authority purchased The Uplands Water System, which had been created originally by Barnes-Connally in the late 80's and evolved through the Regional Transportation Commission (RTC), the Nature Conservancy, and the Lake Pointe Wastewater Plant, being built for Lake Pointe MUD No. 5 by the developer.

In 2002, the Village of Bee Cave was already raising objections to LCRA rates.

In a letter to customers under a monopolistic LCRA water and, in some cases, a wastewater utility, dated June 11, 2007, customers were informed of a proposed two years of 25% annual rate increases in water and wastewater services. Despite customer objections, the first increase was implemented September 11, 2007. At the next meeting of the West Travis County Municipal Utility District No. 5 (MUD No. 5) in Lake Pointe subdivision it was decided to launch a petition drive for a rate case suit to the Texas Commission on Environmental Quality (TCEQ). It was implemented October 3, 2007 under the logo, "We're Getting Soaked". The TCEQ has oversight for water and wastewater utility rates and operations in Texas. MUD No. 5 was soon joined by its sister Lake Pointe organization West Travis County MUD No. 3 (MUD No. 3) and through the adjacent Uplands subdivision, by its municipality, the City of Bee Cave.

A suit was soon filed. Partially in response, LCRA proposed spreading the two year rate increases over three years.

It was two years until a Texas Administrative Law Judge was appointed to hear testimony for the rate case suit. An early decision of the Judge froze the rates at the 2008-2009 rate increase (known as the Phase 2 rate). Testimony and filings were conducted over the next two years with the plaintiffs consistently winning their points.

The LCRA Board soon tired of the ongoing legal proceedings and expenses. In November 2010, they decided to put their water and wastewater retail businesses up for sale.

In January 2011 communities up and down the Lower Colorado River began to organize. An LCRA Coalition was created. To provide an umbrella, the Coalition of Central Texas Utilties Development Corporation (UDC) was formed and Pix Howell emerged as the President. Pix was a former LCRA Board member who advocated getting into the retail business in the mid-1990's, but was disturbed by what had evolved and was working for the City of Leander to purchase their system from LCRA.

During the 82nd Legislature, MUD No. 5 received authorities to own and operate the WTC Regional Water and Wastewater System in Western Travis County and Northern Hays Counties, a system that was largely stand alone.

In May 2011 LCRA conducted (with the Bank of Montreal) a bidder qualification round. It took the UDC some advanced dialog to get on the accepted list. Then in August 2011 bids were due. Initially the UDC bid was felt to be too low.

With the assistance of Senator Watson, a meeting was arranged between the Chairman of the LCRA Board of Directors, Tim Timmerman; the General Manager of LCRA, Becky Motal; UDC Founders Pix Howell, Hays County Commissioner, Ray Whisenant, Bee Cave City Administrator, Frank Salvato, and UDC Attorney, Lauren Kalisek. The purpose was to explain how and why the UDC bid would make LCRA whole. These meetings took place over October and November 2011.

At the November 21 LCRA Board of Directors meeting, a resolution was passed by the LCRA Board authorizing the General Manager and staff to negotiate a sale document with the UDC for signature by December 15, 2011. Negotiations continued into early 2012. LCRA insisted on the termination of the Rate Case as a condition of sale. Both sides were left to absorb their own costs. The freezing of the rates at Phase 2 during the case saved customers approximately $5 million, compared to the legal fees of $1.3 million.

In the meantime, the West Travis County Public Utility Agency (PUA) was duly constituted and created by Hays County, the City of Bee Cave and MUD No. 5. While negotiations continued until the last day, a purchase agreement was executed by the Chair of the PUA and the General Manager of the LCRA. On January 20, 2012, the MUDs' attorney, Randall Wilburn, and the City of Bee Cave attorney, James Mathews, signed the request to the TCEQ to terminate the case.

A private company operator has been contracted to handle all day to day operations, billing, etc. LCRA bonds will be paid off in 2013, 2014, 2017 and 2019 by the issuance of bonds for the PUA. Operating expenses and bond payments will be offset substantially by savings so that rates are expected to rise by no more than 3% per year, instead of the 50 - 75% increases that alternatives would have created.