The heavy debt taken on by HCPUA ratepayers is staggering. Kyle water customers may already be seeing the effects with the city's new budget and anticipated steep increases in water rates
Note: For more on what Pct. 4 Commissioner Ray Whisenant has to say about the county's plan to purchase LCRA water properties, read this earlier post in the RoundUp.
Send your comments and questions to Barbara at hopsonbarbara@yahoo.com, to Commissioner Whisenant at ray.whisenant@co.hays.tx.us or click on the "comments" at the bottom of the story
By Barbara Hopson
Guest Commentary
Two friends in San Marcos have told me they are concerned they may end up helping pay off the county revenue bonds which Commissioner Ray Whisenant says will be issued to buy LCRA water and wastewater properties to serve customers in the north part of the county around Dripping Springs.
Map shows areas of HCPUA membersand water providers. Click on map
for slight enlargement
Officials in San Marcos, Kyle, and Buda formed the Hays County Public Utility Agency (HCPUA) in 2006 to jointly secure water sources for their future water needs, and they are already paying "dearly" (one friend says) for that PUA. (See list of officers and board members here and FAQ link here.) They've already provided for themselves, they feel, and they want Dripping Springs to do the same for itself; they don't want to pay both to the HCPUA and to retire the LCRA revenue bonds.
The HCPUA water acquisition and distribution plan, drawing imported groundwater from Gonzales and Caldwell counties, will be accomplished in two phases, according to information from the PUA's website: Phase 1 is expected to be on line in 2018 and Phase 2 in 2032. The website appears not to have been updated since February.
The heavy debt taken on by HCPUA ratepayers is staggering. Kyle water customers may already be seeing the effects with the city's new budget and anticipated steep increases in water rates. The expected cost of constructing the facilities is $323,296,000 (in 2008 dollars). On top of that, there is a high annual operating cost, expected to reach $43,566,000 when both phases are complete.
Since Commissioner Whisenant, of Dripping Springs, seems not to know himself the eventual cost of buying, renovating and expanding the LCRA water utility properties, it is hard to compare those costs with the expense HCPUA has already signed on to.
Hays County and other entities are preparing to make offers to purchase LCRA's properties by an Aug. 8 deadline.
It is generally supposed that Hays County will buy the West Travis properties, and LCRA is asking $142 million for those. In addition, LCRA had planned (before it decided to sell 32 water/wastewater properties) to upgrade and expand the West Travis group over 2011-2015 at a cost of $23,576,000. That's a total of $165,576,000 that we know of.
Woodcreek, Woodcreek North, and Wimberley Springs complain about their outrageous water/wastewater bills from Aqua Texas, but those bills may seem moderate when compared to the cost of imported LCRA surface water. The City of Wimberley customers, for the time being, seem happy with the current low rates of Wimberley Water Supply Corporation.
So it all comes down to the fact that San Marcos, Buda, and Kyle have HCPUA for their future water, and Wimberley, Woodcreeks, and Wimberley Springs have WWSC and Aqua Texas for their water. It would seem only fair that Dripping Springs should pay for the LCRA assets which they want for their future water needs.
19 comments:
This is a very simplistic and misleading article on the water sources for the City of Kyle. Please. You need to do some more research.
Yeah, last I heard Kyle was working hard to drain the Edwards Aquifer and now they want to take the groundwater from neighbors to the east. The exploding growth, which everybody over there is so proud of, has made Kyle the biggest water hog in the county.
Kyle also gets surface water from Canyon Lake. And they pay for it themselves.
What is that city property tax rate now in Wimberley? You still dumping your septic overflow in the creeks and rivers?
Thanks, Barbara, for the insight and bringing some much needed "details" into the light.
First Anonymous... Drive-by comments like yours aren't very insightful. Please share what you know.
To First Anonymous:
What is misleading about what I wrote? I didn't say, for example, that HCPUA will be, or is, the only source of water for Kyle. But it is undeniable that the City of Kyle is one of the charter members of HCPUA, whether you are aware of it or not. HCPUA has a website (www.hcpua.org), but it hasn't been added to for a while. But you can read some of the history of it there and see names of the member cities and water suppliers. (Also search for "Hays County Public Utility Agency" in your hometown newspaper, the Hays Free Press.)
So far as I know, no city of any size in Hays County depends on only one source of water. San Marcos, for example, gets its water from the Edwards Aquifier and from Canyon Lake (through GBRA). Kyle and Buda WILL be getting water from the Carrizo Wilcox aquifer in Gonzales and Caldwell counties when the HCPUA pipelines are finished, but they have other sources now.
I haven't looked at Kyle current and past annual budgets, but I've been reading in the hundreds of pages of City of San Marcos 2008-09 and 2010-11 annual budgets. I've been looking for costs to San Marcos citizens for the Hays Caldwell Public Utility Agency, which will eventually bring imported groundwater to the PUA's member cities and water suppliers. The San Marcos 2008-2009 budget has this statement under "Budget Overview" on p. 12: "The Water Fund also added first time operating expenses of $603,440 related to becoming members of the Hays Caldwell Public Utility Agency (HCPUA)."
This statement is from the 2010-11 annual budget for San Marcos (p.9):"The Capital Improvements Program has been increased by approximately $21.9 Million for the Water/Wastewater Division since the previous rate study was completed in 2009. The CIP was increased largely due to the adjusted infrastructure timelines imposed by the Hays Caldwell Public Utility Agency."
And, last, here are some figures from the Capital Improvement Projects for San Marcos for 2009-2018 from the line item "Begin to acquire future water supplies through participation with Hays Caldwell Public Utility Agency for Carrizo Wilcox aquifer water" (pp.15-16):
2009 - $338,513
2010 - $188,575
2011 - $99,250
2012 - $119,100
2013 - $119,100
2014 - $317,600
2015 - $813,850
2016 - $813,850
2017 - $11,493,150
2018 - $11,493,150.
The HCPUA Carrizo Wilcox Aquifer plan will be financed by general obligation and (mostly) revenue bonds.
These are not the total costs of the HCPUA water project, and they are only San Marcos' part of the cost. Kyle, Buda, and other HCPUA members will have costs, as well.
These figures do show that San Marcos is providing for its own future water supply, and their citizens hope all other cities and towns in Hays County will do the same for themselves.
PROPER MANAGEMENT AND CONSERVATION of the aquifer in the western part of the county will ENSURE A LONG TERM SUPPLY FOR CURRENT RESIDENTS. The powers that be will have to put aside pressures for unsustainable and unneeded development. The great silent majority of residents who have no financial stake in more development must organize, must raise their voices louder and more often. The whole thing unravels if the powers that be force expensive imported water on the citizens.
"Revenue Bond -- Bonds whose principal and interest are payable EXCLUSIVELY from user fees. Revenue bonds are BACKED BY the full faith and credit of THE GOVERNMENT ENTITY."
So the 7,000 LCRA users in the Dripping Springs area are, by definition, to be the only people who will pay off the revenue bonds for LCRA properties. BUT, if those users aren't able to pay the debt, then the government entity (Hays County Water & Sewer Authority, most likely = all taxpayers in the county) will have to step in and
make the payments. That default is what I predict will happen, and I think the commissioners know it. Some of them are so driven to buy the LCRA properties that they will assure us with straight faces that only the users will pay the debt, but they know that is impossible, and so Hays County (all of us) will step in and take up the burden.
In my comment of July 28, 11:17 PM, I said "The HCPUA Carrizo Wilcox Aquifer plan will be financed by general obligation and (mostly) revenue bonds."
I should have said it will be financed by CERTIFICATES OF OBLIGATION and revenue bonds.
Certificates of Obligation (COs)
can be issued by a government entity such as a City Council, WITHOUT voter approval.
Barbara - I would encourage you to get in touch with David Wilson who is on the Kyle City Council and has been dealing with water issues in Kyle for many years (beginning as a citizen). You can get his contact information off the City of Kyle website.
Dennis Rose is also a very good source of information.
Kyle and San Marcos (and maybe Buda) also obtain surface water from Canyon Lake (GBRA) via a pipeline (if I recall correctly).
- Lila Knight
To Lila,
Yes, both San Marcos and Kyle get Canyon Lake surface water via a pipeline that goes to New Braunfels. From NB there is a pipeline that goes to San Marcos Water Treatment Plant off I-35 South and then to cities of San Marcos and Kyle (and maybe Buda).
The first phase of the HCPUA pipeline from Gonzales & Caldwell counties won't be online for SM, Kyle, Buda until 2018. That's why
the San Marcos CIP budget for HCPUA goes only through 2018, at this point. The budget will call for many millions more between the years 2018-2032, when Phase 2 of the pipeline is built.
Apparently Kyle hasn't determined how to pay its share of the HCPUA pipeline. It has been paying its HCPUA assessments from balances of funds other than the water/wastewater fund of the city budget. As reported by Brad Rollins, in talking about the Kyle budget, City Manager Lanny Lambert "specifically mentioned wastewater treatment plant operations and payments to the HAYS CALDWELL PUBLIC UTILITY AGENCY that have been paid out of fund balances or impact fees, a practice he called 'highly irregular' and said should be investigated."
Rollins also reported that Kyle plans steep water rate increases over the next three years: a 30% rise in the coming fiscal year, 20% in the year after that, and another 20% in the year after that. I feel sure those rate rises are due in large part to ongoing HCPUA construction costs through the year 2032. They may also be caused by rising surface water rates for the water piped to Kyle from Canyon Lake.
Said by DELTA (Don't Empty Lake Travis Assn.):
"Cities have a choice: Buy water from the water companies and avoid the costs of infrastructure OR join with other cities forming groups like the Hays Caldwell PUA, or the BCRUA, and put in their own infrastructure for aquifer water."
BCRUA is the Brushy Creek Regional Utility Authority, formed by Cedar Park, Leander, and Round Rock. They were one of the first PUAs in the state, if not the first. Reading their FAQs is a good way to see how a PUA works. Go to www.bcrua.org.
Here's more bad news for those wanting LCRA water from Lake Travis:
The three cities composing the Brushy Creek Regional Utility Authority (BCRUA) have contracts with LCRA to draw water from Lake Travis, and their water treatment plant (WTP) near Cedar Park is scheduled to go online in 2011. That plant will have a capacity to treat 30 mgd at the beginning, with water conveyed to the WTP by a temporary, floating raw water intake structure. Ultimately a larger, permanent WTP will be built that will process 142 mgd of raw water. The total project is estimated to cost about $354 million.
That will be a lot of water taken from the dwindling supply in Lake Travis, and the BCRUA WTP is ahead of Dripping Springs in the line to draw water from Lake Travis. With the reservoirs approaching empty at the headwaters of the Colorado River near Midland; and with the Llano River - a tributary of the Colorado - now dry, forcing the city of Llano to truck in water; and with no rain falling to help fill the Colorado, it looks pretty bleak for possible new users of Lake Travis for a water supply.
The current estimated cost of the Hays Caldwell Public Utility Agency (HCPUA) pipeline project is approximatley $122 million. Kyle has a 28% share in the project and has committed to put in about $34 million. Buda has a 5% share and will provide around $6.1 million. That leaves approximately $81.9 million to be paid by San Marcos and three water supply companies.
Kudos to San Marcos, Buda and Kyle for planning ahead with regards to their water needs. I'm much happier having a governmental agency overseeing such an important resource than a company like Aqua Texas.
San Marcos Finance Director Steve Parker told the San Marcos City Council on August 2 that the total cost of the Hays Caldwell Public Utility Agency (HCPUA) will be approximately $115 million, and that San Marcos will pay about $40 million for its share. Other partners in HCPUA are Kyle, Buda, and three water companies (not Aqua Texas).
San Marcos proposes to pay $586,431 to HCPUA for the next fiscal year, and is searching for ways to fund future assessments, which are slated to reach over $11 million for each of years 2017 and 2018. Water and wastewater rate rises will be moderate for the next fiscal year, but they will rise in future years as HCPUA construction accelerates.
Since Commissioner Whisenant has shared very little info with Hays County residents on particulars of the proposed LCRA purchase(s), it's sometimes helpful to read the newspapers of other cities involved.
The June 1 issue of the Leander Ledger, in an article by Mary Hurwitz, said that the City of
Leander is offering two separate bids to LCRA:
1) the first is a bid for only the
Sandy Creek Wastewater Treatment Plant (WWTP), and
2) the other bid is a joint bid with the entire Coalition (of which Hays County is a member )for
all 28 LCRA properties.
Interestingly, these are what is called "indicative bids." An indicative bid is not a formal bid, but is a serious one.
"It's a sincere bid, but it's not a binding commitment," Interim City Manager Robert Powers [of Leander] said. "It is seen as an informal bid, but then there will be due diligence."
If Hays County is making indicative bid(s), too, then it would have saved all of us some worry about a binding bid on Aug. 8 if Commissioner Whisenant had shared with us that little piece of
information. Too much secrecy.
Some of Hays County Commissioners have raised the fear that investor-owned utilities (IOUs), rather than public-owned utilities, might buy the LCRA water facilities. This paragraph from an August 12, 2011 issue of the Austin Chronicle states:
"The LCRA's board appears set to award the systems to a bidder at its Aug. 24 meeting. In addition to the consortium of municipalities [the UDC], bidders could include what appears to be an Australian hedge fund, the infrastructure investment arm of Wall Street firm Morgan Stanley, and a Bastrop-based nonprofit, Aqua Water Supply Corporation [no connection to Aqua Texas or Aqua America]. Because the process is secret, that list is something of a guess based on a list of firms that signed a confidentiality agreement in order to get bidding documents. There is no certainty that any of those firms have actually submitted a bid."
So the Coalition may or may not be
bidding against IOUs.
The article also suggests that LCRA is overpricing many of its pieces in the pie. The mayor of West Lake Hills, Dave Claunch, says "They wanted all of their future profits over and above their costs....We're considered one of the plums in the system. We're profitable for them. A lot of the other systems are not...." Claunch is not optimistic about the UDC's chances of being the winning bidder for the 30-odd facilities up for sale. West Lake Hills and other cities have also put in bids with LCRA for the individual properties they want. Whether Hays County has done likewise, we citizens don't know.
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