WEST TRAVIS COUNTY PUBLIC UTILITY AGENCY – OVERVIEW
The West Travis County Public Utility Agency (Agency) is a publicly owned Water and Wastewater Utility that serves Western Travis and northern Hays Counties. Services are provided for roughly, 7,700 retail water customers; 2,500 retail wastewater customers; 13 wholesale water customers, and two (2) wholesale wastewater customers. Currently the Agency provides water and sewer services to an estimated population of 35,000 persons.
History Of The West Travis County Water And Wastewater Utility Systems
The Lower Colorado River Authority (“LCRA”) originally developed the West Travis County Regional Water and Wastewater System (WTC Systems). The formation of the WTC Systems occurred during the late 1990s to early 2000s, when the LCRA purchased the Uplands Water System, the Hill Country Water Supply Corporation and the Lake Pointe Wastewater Treatment Plant.
In November 2010, the LCRA announced its intent to divest itself of thirty-two water and wastewater utility systems, including the WTC Systems. The LCRA also announced its intent to sell these systems to a single buyer. In response, communities along the Lower Colorado River organized and formed the Coalition of Central Texas Utilities Development Corporation (UDC) in January 2011. The UDC was a publicly owned investment vehicle, that could be utilized to purchase the 32 systems if necessary, but the primary objective was to ensure that the systems remained under public ownership, rather than become private, for-profit systems. Through extensive negotiations, the UDC successfully secured public ownership for most of the LCRA systems. As a result of the UDC and other forward thinking individuals and political subdivision efforts, the Agency was created under Chapter 572 of the Texas Local Government Code as a vehicle for ownership of the WTC Systems.
Public Utility Agencies
Texas Local Government Code, Chapter 572, Subchapter C, grants authority to public entities to create a Public Utility Agency (PUA) by concurrent ordinances to provide for the collection, transportation, treatment, or disposal of sewage or the conservation, storage, transportation, treatment, or distribution of water for a participating public entity that owns jointly with the agency a facility in this state. A PUA is a separate agency and is a political subdivision in the State of Texas. A PUA may not charge a tax, but generally has all the other powers related to facilities provided by law to a municipality that owns a water and or sewer facility.
The Agency was created through the adoption of concurrent ordinances by the City of Bee Cave, West Travis County MUD No. 5, and Hays County. Each entity individually published notices of its intent to create the Agency and held public hearings, in compliance with Chapter 572. No one objected to the creation of the Agency at any of the public hearings held by each entity.
The three entities further clarified the structure of the Agency through the joint execution of the Acquisition, Water Supply, Wastewater Treatment and Conditional Purchase Agreement (the “Participant Agreement”). The Participant Agreement requires all Agency system cash flow, after the payment of operating expenses and debt service, to be used to cash fund any required system improvements, expansions, and then to promote rate stability. In order to help ensure access to future financing, the participants are restricted from taking any income or compensation from the Agency.
Installment Purchase Agreement With LCRA
For the purchase of the WTC Systems, the LCRA required compensation for the principal balance of bonds and commercial paper allocated to the Systems, in addition to any defeasance costs to retire those bonds early. Due to the high LCRA defeasance cost estimates, the Agency along with the UDC, negotiated an installment purchase agreement whereby the Agency pays the LCRA for annual interest and principal payments on all bonds that the LCRA had allocated to the WTC Systems, until they become callable. At that point, the Agency issues its own bonds to pay the LCRA the principal due for the bonds plus accrued interest. The first and second installments, totaling approximately $121 million, paid to the LCRA were in 2012 and 2013, respectively. The final installment payments are due in 2015 and 2019. The Agency did not pay a premium, above the amount of the debt allocated by the LCRA, to purchase the system assets. The Agency will pay the LCRA an estimated total of $165 Million for the WTC Systems.
The WTC Water System currently serves an area of approximately 225 square miles and includes more than 260 miles of pipeline, ten pump stations, eleven pressure planes and two elevated storage facilities. Hydraulically, the system is complex to operate due to the disjointed nature of the areas of service, long transmission distances, varied topography and system improvements built over a period of more than 40 years.