Water company, Pflugerville reach deal on rate hike

"Ultimately, the goal is to find a way for you to have a better product, to have better, higher-quality water, hopefully at a better price. We probably weren't going to get there with swords drawn," Coleman said.

The agreement

The agreement calls for SouthWest to withdraw its application to merge Windermere Utility Co. with six other water companies throughout the state, not seek any rate increase for 12 months and to waive any other new miscellaneous fees for the same period of time.

Chuck Profilet, vice president of SouthWest, said the company was pleased with the agreement and has no plans to raise rates in the period immediately after the 12 month period is up.

In return, Pflugerville will pay SouthWest $176,752—a number both sides said covered legal fees and the cost of purchasing water from Austin during peak demand—and agree not to institute condemnation proceedings for 12 months.

Condemnation proceedings would have been the first step in an attempt to force the water utility to be taken over by the City of Pflguerville.

The city also extended its contract to sell wholesale water to the company for a year.

The yearlong reprieve will allow SouthWest and the city to negotiate a solution during that period without "lawyers with knives at each other's throats," Pflugerville City Manager Brandon Wade said.

"The downside is that if we don't come to an agreement, we could be right back where we started," Wade said. "Hopefully it will get us to a solution."

That solution, in Wade's mind, will hopefully include some kind of private-public partnership, he said, adding that either way, the reprieve is good for the city.

The agreement went into effect as of the April 10 meeting.

Reaction

Several residents who spoke took issue with the agreement as too lenient.

Those who spoke out against the agreement said they had hoped Pflugerville would take over the water utility and provide more immediate relief to water rates that are already higher than other providers in Pflugerville.

"I'm kind of disappointed that with all the fire you had behind you, you're going to cut a check to SouthWest water. What do they have to lose?" resident Reanna Garza said.

Many residents were visibly angry and called for SouthWest to leave the community entirely.

"We want them out, and the longer you sit up there and go through this process and wait and see we're suffering. We want them out period," resident Joseph Linnen said.

Profilet did not dismiss the idea of selling the Windermere utility to Pflugerville.

"Everything is on the table. I will take that back to the board and discuss it," he said.

Background

The agreement came six weeks after the council approved a resolution authorizing city staff to take steps to fight a water rate increase and address water quality issues, including the use of eminent domain by the City of Pflugerville to acquire the water system.

Eminent domain would allow Pflugerville to force a takeover of the Windermere utility system in city limits. City Attorney George Hyde said that for Pflugerville to pursue such an avenue, the city would have to essentially show that there was a public necessity for the city to take over the water system.

"Your council is bound and determined to do anything it can do, up to and including fighting the fight and condemning Windermere water if that's what it comes down to," Coleman said at a Feb. 28 City Council meeting.

Monarch Utilities filed a transfer application with the Texas Commission on Environmental Quality in February 2011 to merge Windermere with six other water utility companies in Texas. The company then filed a rate increase application the following month. Pflugerville made moves to halt the increase in August, eventually denying it in November.

Monarch appealed that decision to TCEQ, but that appeal will be withdrawn as part of this agreement.

Profilet said this agreement restarts the merger proceedings for the other six water utilities as well, as Windermere's 5,000 customers represented roughly half of the customers in the seven companies.