The city of Pflugerville is working with Manville Water Supply Corp. to establish a positive working relationship as well as long-term goals for providing residential water service.
Manville, Southwest Water Supply Corp. and the city all provide water to different areas of the city. In the past, Manville and city staff have worked together to address issues such as line breaks and improving utility infrastructure in Manville’s service areas. Pflugerville and Manville officials also negotiated the right to provide water to areas within the city, a process referred to as transferring certificates of convenience and necessity, or CCN.
In a July 23 presentation the City Council, Pflugerville City Manager Brandon Wade laid out six priorities for the city’s working relationship with the corporation. The first entails Manville transferring some of its service area in the Sorento housing development to the city. Wade said the negotiations are complete and are now awaiting approval from the Texas Commission on Environmental Quality.
Before transferring the CCN, Manville was slated to serve approximately two-thirds of the development’s 333 acres. However, Sorento is located next to Pflugerville’s water treatment plant and Lake Pflugerville, making it easier for the city to serve the development. The city paid $250,000 to Manville for the transfer.
“In good faith, we sold the CCN to the city of Pflugerville,” Manville General Manager Tony Graf said. “We let them purchase that from us at a lower rate than what we could have gotten.”
The second stated priority entails transferring the CCN for part of an area formerly known as the North Travis County Municipal Utility District No. 5 from Manville to Pflugerville. Before NTC MUD No. 5 was annexed by Pflugerville, it contracted with Manville to provide water through 2036.
“What has happened is, over the years, various contracts have been signed, various MUDs have been annexed, CCNs have been transferred and all of these things have been done in a very incremental manner,” Wade said. “What we’re trying to do is go back and tidy these up.”
As its third priority, the city is looking to take over CCN for areas on Pflugerville’s eastern side, including areas near the SH 45 and SH 130 interchange.
The first step in negotiations for those transfers will be to find the value of the CCN and make estimates on how much money Manville could have collected from water rates if it kept the contracts. Manville’s priority in turning over the areas is recuperating revenue so that it does not have to force higher rates on its customers.
“There’s no established formula for doing that kind of thing,” said David Reichek, president of the Manville WSC board of directors. “When we look at doing a transfer like that, our priority is to try and make sure we’re getting fair compensation, because, especially as board members, we have fiduciary and legal duties to make sure that we are serving our shareholders. It’s not always easy to calculate what’s fair, but we do the best we can.”
Working to establish that formula is another city priority in helping develop a long-term relationship with Manville. Parts of that relationship will include an acquisition model for future CCN transfers and a memorandum of understanding as a basis for future negotiations. Wade said maintaining a good relationship with Manville is key to continue serving utility customers.
“We are growing together, Manville and the city, and there comes a point where we need to have a plan in place for what is going to be solidly our area in the future and solidly their area in the future so we can both do the planning we need to do moving forward,” Wade said. “What [also] makes it absolutely essential that we have a continued positive relationship is that we’ll be the sewer provider [in areas Manville serves].”
The remaining priorities for the city, which dealt with the possible transfer of MUDs and Water Control and Improvement Districts, and which would have covered negotiations for the city to obtain CCN rights for areas in Pflugerville’s west side, were removed from discussion after further review, Wade said.
Wade told city officials the decision on the Sorento development is imminent and he expects to work on the transfer of the former NTC MUD No. 5 and the areas in East Pflugerville this year and into next year. Manville officials, however, said negotiations with the city will depend on the relationship they develop with the city. In the past, Reichek said Manville has felt it has been improperly blamed for issues.
“We have always tried to be accommodating to the city,” Reichek said. “But whenever there is an issue with infrastructure … a lot of times the city, it seems, from our perspective, will, in press releases, go to great pains to assign blame, and it always seems that we’re getting [dragged] through the mud. What we’ve communicated to [the city] is our relationship going forward is partly going to depend on the city’s behavior toward us, because, in our eyes, it should be an equal partnership built on mutual respect, and we don’t always feel like that’s been the case.”
However, both Reichek and Wade said recent negotiations have gone fairly smoothly, and both entities plan to continue meeting together monthly to work toward their goals.