"We are using five different approaches to look at (the system's) value and none of them have to do with (county) ad valorem taxes or speculation . . ."
– Pct. 4 Commissioner Ray Whisenant
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Whisenant is leading the county'sinterests in purchasing LCRA
water properties
Editor
Contrary to at least one local newspaper report, Hays County Commissioner Ray Whisenant says the county intends to submit a bid to purchase a portion of LCRA-owned water utilities by the time a new deadline set by the LCRA, August 8, arrives. The initial deadline was Aug. 3.
A front page banner story in the Wimberley View Wednesday July 20 edition apparently got it wrong. The headline says "Hays County holds up bid on LCRA water and wastewater utilities."
The paper reported that county commissioners, at their July 12 commissioners court meeting, "decided to delay committing their bid, through the Central Texas Utility Development Corporation, to buy utilities from the Lower Colorado River Authority."
West Travis system/Click on map to enlarge
LCRA put its water systems up for sale last year, stating that the systems are revenue losers, to the tune of $3 million-plus annually.
An LCRA representative, speaking to commissioners in February, put a price tag for the West Travis system at between $130 million and $140 million.
Whisenant and the commissioners court (save for Pct. 2 Commissioner Mark Jones who has opposed Hays County's involvement) have come under increasing criticism and scrutiny from the public for launching into a possible purchase of a section of the West Travis Regional Water and Wastewater System without knowing all the potential financial costs and pitfalls.
The Hays County portion of the West Travis system includes the Hwy 290 LCRA surface water pipeline that serves retail and wholesale customers in the northern part of the county and the old Hill Country Water Supply pipeline system. LCRA also supplies water through the 290 pipeline to the Dripping Springs Water Supply Corporation.
Whisenant and Pct. 3 Commissioner Will Conley have repeatedly stated the county would pay for its investment through the sale of revenue bonds supported only by users of the Hays County portion the LCRA system. Critics say 7,000 customers in the county couldn't possibly support a system reportedly deeply in debt and which may be in need of costly repairs or expansion.
Whisenant said he is hoping financial consultants hired by the coalition to conduct the due diligence review will soon have more information on the LCRA systems' revenues and other information.
Whisenant said he couldn't guess what amount the county's or the coalition's bid will be.
"We are using five different approaches to look at (the system's) value and none of them have to do with (county) ad valorem taxes or speculation. It is being studied," Whisenant explained. "The real story is the LCRA decided to sell this because everybody knows they couldn't show on their books that they could hold on to it."
The purchase price and other details of the negotiations will not be made public until after a final deal is signed with the LCRA because of privacy agreements between the parties, Whisenant said.
5 comments:
Hays County (Hays County Water & Sewer Authority?) might possibly succeed in buying the LCRA West Travis properties for less than $140 million. Because
1. All bidders know that LCRA doesn't want to hang on to them because they lose money on a grand scale.
2. There may not be many bidders for that West Travis group.
3. Many of the facilities need to be repaired and/or expanded.
4. LCRA wants to concentrate on its more profitable business of electric power transmission.
NEVERTHELESS, why should the current 7,000 LCRA users want to take on the massive purchase cost and repairs? It's magical thinking to believe 7,000 people can pay off such a debt.
one never justifies the expansion of a utility on the basis of current users. In this case this area of the county is growing rapidly. The number of users is expected to quadruple in the next 20 years.
The county has a choice. buy the system or let a private owner buy it. In either case, the cost will go up, but at least if purchased by the county it can be operated at the lowest cost to consumers.
This should be much less than $140 million, probably closer to $20 million. there's just no business value in it until another $30+ million is invested for expansion.
Who do you think's gonna pay for that? What do you think the collateral will be on the loan? Every taxable piece of property in Hays County.
D-e-v-e-l-o-p-e-r-s-u-b-s-i-d-y.
3/4 of the county does not wish to pay for expensive water systems for 1/4 of the county while we're still paying for our own. to hell with the developers.
Looks like LCRA might have reason to make a deal on the West Travis assets (and, in fact, on ANY of their for-sale properties). A higher TX court has said that San Anontio Water System (SAWS) can sue LCRA, after all, because LCRA backed out of a deal to provide water to SAWS. LCRA may need some ready cash soon!
In 3 days (on August 8) Hays County and the Coalition will submit a bid to LCRA to buy something. The public still doesn't know what the county will be buying, how much it will cost, how much repairs and additions will cost, how only 7,000 users can pay off the revenue bonds for the purchase, etc.
It is unconscionable and unbelievable and anti-democratic that our commissioners can obligate us to pour hundreds of millions of dollars into a project without telling us anything about it.
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