Hays County amends Forestar contract

After a 4-1 vote May 13, Hays County Commissioners appear intent on pursuing water in Lee and Bastrop counties. Hays County Commissioners approved an amendment to a water reservation contract with Forestar Group that was originally signed in October.

The agreement, for 45,000 acre-feet of water annually, has been held up because the Lost Pines Groundwater Conservation District, a water permitting entity in Bastrop and Lee counties where the water would come from, only allowed Forestar access to 12,000 acre-feet of water per year.

The new agreement creates classifications for permitted and unpermitted water.

Under the original contract, Hays County was to pay Forestar $1 million each year for a five-year term for reservation of water in the Simsboro Aquifer. Based on the original contract amount of 45,000 acre-feet, the county would pay a rate of $22.22 per acre-foot of water, which would total $1 million.

Under the new agreement, the county is paying $22.22 per acre-foot of permitted water—an amount that currently stands at 12,000 acre-feet—and will pay Forestar $4.04 per acre-foot for a reservation on the additional 33,000 acre-feet of unpermitted water.

Hays County will still pay Forestar $1 million for the first contract year, as per the original agreement. In the second year, which begins Oct. 1, Hays County will pay Forestar $500,000, with $400,000 to represent payment of the second year and the remaining $100,000 to represent "prepayment of liquidated damages due to Forestar in the event Hays County decides to terminate this restated agreement ninety days prior to the commencement of the third year of this restated agreement," according to the agreement.

Lon Shell, chief of staff for County Judge Bert Cobb, said if Forestar is able to secure permits for additional water from the Lost Pines GCD, the total amount paid will change based on the permitted and unpermitted rates in the agreement.

Cobb said he is hoping the Forestar agreement, along with conservation and reuse efforts, will help protect Hays County residents new and old from the drought.

"We build roads based upon projections of populations. We build schools based on population projections. We build streets and infrastructure based on projections. The [water] plan we've had in the past has been based on an 8 percent growth rate. Now we're approaching a 20 percent growth rate," Cobb said.

In a rare break with his fellow commissioners, Precinct 3 Commissioner Will Conley voted against the measure. Conley said he agrees with the court that securing a long-term water supply is important, but he was uneasy about moving forward in light of a recent decision by the state attorney general not to make a ruling on whether Hays County can purchase water from a private firm using tax dollars.

"We've had an opportunity over the past year for people to come to the county and participate in many different levels ... and for different reasons that I can't fully identify exactly, that hasn't occurred To this point we've been unsuccessful in the ability to get [a partner]. That tells me something about the market. That tells me something about possibly the deal we have before us today," Conley said. "Maybe if we step back and work in a different direction and different process, maybe we could develop more of a regional partnership and that market would be more sound."

David Wilson, chairman of the Hays Caldwell Public Utility Agency, which consists of the cities of San Marcos, Kyle and Buda, as well as several member-owned water utilities said he appreciates the county's leadership in water issues.

"Nothing is more important to the future of our community, our country and our children than clean available water," Wilson said. "We are on the same page when you talk big picture. When it gets to fine details, we have some concerns about the specifics of the deal Forestar has proposed to you."

Wilson said the HCPUA's experience working to deliver water to cities along the I-35 corridor over the past decade has highlighted the importance of details such as engineering, leasing rights and pipeline estimates. Many of those details are absent from the county's agreement with Forestar.

"The devil is in the details when we're trying to do God's work," Wilson said.

Shell said he expects Forestar to sign the contract this week.
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