City, Chisholm Trail SUD ponder water utility merger

Consolidation could secure future water sources, stabilize rates

Over the next two to three months members of the Georgetown City Council and the Chisholm Trail Special Utility District board of directors will determine how and if they will proceed with merging the Chisholm Trail SUD and city water utilities.

In June, the two entities heard the results of a six-month feasibility study that recommended the creation of a local government corporation, or LGC, to help ensure water supplies for future growth and keep water rates stable.

Assistant City Manager Jim Briggs said the City Council and the Chisholm Trail board would discuss the recommendations separately and decide whether to move forward with negotiations.

"I think for both the city and Chisholm [Trail SUD], the study is going to create a great deal of discussion and evaluation on the systems," said Gordon Pierce, Chisholm Trail SUD interim general manager. "A decision in the future is going to be of great impact and importance to this county and our customers in Bell County. It's a very important decision that will impact a lot of people."

Although neither group has committed to move forward with the LGC, some residents said the uncertainty makes them nervous for the future.

"There are a lot of people that have to say yes before this can happen, and there is an extended amount of time where this can fall apart," said Mike Sweeney, chairman of the Woodland Park Ad Hoc Water Committee, adding that the uncertainty of what could happen through the process could drive away development. "Developers will start to question the vitality of the area."

Water capacity and development

For new developments to be approved, Chisholm Trail SUD has to be able to guarantee water for that development, Briggs said.

"If a large development came in, there wouldn't be enough raw water to approve that development," he said.

According to the feasibility study, Chisholm Trail SUD is limited in its ability to provide service to future customers. Chisholm Trail SUD, like the City of Georgetown, receives most of its raw water from Lake Georgetown. Without a merger or additional water sources, the report says the district could commit all its surface water resources by 2016–17.

"At some point in time, if we stand alone, we will have to seek additional water sources, but it's kind of a crystal ball at this point as to when that would happen," Pierce said.

The district has access to 12,551 acre-feet of raw water and is already committed to provide 10,283 acre-feet of water per year to its current customers. According to the report, the utility also draws water from groundwater wells, but they are not a reliable source because the well levels fluctuate.

"Retail development in Georgetown depends on rooftops—the more rooftops, the more disposable income and the more services required," Briggs said. "If Chisholm Trail has no water available to the community to the west, and you have no availability to put more rooftops on the ground, what's going to happen to potential development? They're not going to put in a new H-E-B."

Briggs said the effect on economic development would not be just on the west side of Georgetown, but could affect the entire city's economy.

"The economy in Georgetown—if the growth and activity just to the west does not continue—will suffer," he said, adding that without the added property and sales taxes new development brings, there is added pressure on residential property tax to sustain city services.

Two into one

While the study, completed by Water Resources Management LLC, HDR Engineering Inc. and CDM Smith, made the recommendation for a LGC, it did not outline specific details such as water rates, Briggs said.

Under the LGC Georgetown Utility Services could take over water services for all or a portion of Chisholm Trail SUD customers, about two-thirds of which live in or near the city's ETJ.

The proposed plan, during a 15-year period, could save about $27.5 million dollars through shared costs and would allow time for the city to find future water contracts.

"We do not have enough water to take on the commitments or the responsibilities of the district for continued growth. We don't plan on using those resources to meet the long-term commitments of the district's service territory with the water that Georgetown has," Briggs said. "We would use those water resources to be able to give the district's service territory and customers time to evaluate new, sustainable resources of water that might be available without the need of emergency planning and do it in a more appropriate time frame for planning for raw water supply."

Briggs said under the LGC, the city would operate the entire system, but the Chisholm Trail customers and Georgetown's customers would be financially separated because of the different levels of services and costs related to each customer base.

Next steps

Once a decision is made on whether to move forward with the consolidation, both entities would need to decide how to proceed. If the LGC is selected, the city could incorporate the entire district or a portion of the district's service territory into its water utility.

According to the report, the entities could take another 18 months to negotiate contracts, complete the public comment process, receive approval from the Texas Commission on Environmental Quality and complete the transfer.

"It takes courage to take on this issue, and this issue is not going to go away," Sweeney said. "I am hopeful Chisholm Trail will dissolve and become part of the LGC. I don't believe in the long term we can stay as a utility without unacceptable costs."



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