Residents of Bee Cave, West Travis County Municipal Utility District No. 5 in the Lake Pointe subdivision and a portion of Hays County are being forced to pay increased costs for water and wastewater services, West Travis County Public Utility Agency board President Larry Fox said.

Legislation that would have converted the WTCPUA into a regional water and wastewater authority and could have reduced those water and wastewater service rates failed in the 83rd session of the Texas Legislature.

Battle brews

In its $140 million contract to buy the utility system from Lower Colorado River Authority, WTCPUA agreed to accept LCRA's contracts and make installment payments to LCRA until 2019. The agency paid $25 million to LCRA in 2012, and Fox said the agency will pay a

$90 million installment this year. WTCPUA will issue bonds to fund the upcoming payment.

WTCPUA sought to minimize its costs by converting into a regional utility company to help it become more attractive for a better bond rating, Fox said. With a better bond rating, the agency could qualify for bonds at a lower interest rate and pass the savings on to customers, Fox said.

Rep. Paul Workman, R-Austin, filed

House Bill 890 during the regular legislative session. Workman said he was approached by the WTCPUA to sponsor a bill that would save ratepayers money. On Feb. 12, the companion Senate Bill 508 was filed by Sen. Kirk Watson, D-Austin, but was not acted upon.

Fox said the two bills aimed to convert the WTCPUA into the Hill Country Regional Water Authority and give the new entity the right to issue revenue bonds and impose fees.

Fox said proponents of HB 890 were surprised when Rep. Lon Burnam, D-Fort Worth, blocked the bill's passage on

May 17.

"Our bond counsel told us if the bill failed we would not get as good a bond rating," said Fox, who estimates that as a result of

HB 890's failure, the agency will be paying about $14 million–$17 million more in interest payments during the course of the bond issue.

Burnam objected to the bill partly because it allowed WTCPUA to appoint the new regional utility's governing board members without an election, said Conor Kenny, Burnam's chief of staff. The regional board members proposed in the bill included all current WTCPUA members as new directors.

Bill Bunch, executive director of Save Our Springs Alliance, an environmental coalition that opposed HB 890 and SB 508, said that if the bills had passed, the new regional water authority would have been controlled by a developer-dominated appointed board.

"[The board would have] no accountability to voters or existing ratepayers," Bunch said.

S.O.S., an environmental coalition that focuses on protecting Barton Springs and the Edwards Aquifer, was joined by Hays County's Water Control and Improvement District 1 in lobbying against the bills.

Bunch said the bills would have forced the system's existing customers to pay much higher water rates to finance the Hill Country's new developments.

"The bills would have been used to subsidize future expansion for developments not yet on the map," Bunch said. "Barton Creek West residents, who have already been paying for their pipes, would pay the same as residents of a new Dripping Springs development, which was requiring new pipes."

History

In 2012, following a prolonged battle between LCRA and its customers over proposed rate increases, LCRA sold off a local water and wastewater retail system to the WTCPUA, Fox said.

LCRA wanted to focus on managing the river, conservation and future water needs when it decided to sell all its utility systems, LCRA Public Information Officer Clara Tuma said. Utility revenue was not covering LCRA's full cost of operation, so ongoing rate increases were needed, Tuma said.

After the sale in January 2012, the WTCPUA was formed with the city of Bee Cave, northern Hays County and WTC MUD No. 5 as buyers of the area's water and wastewater operations. Its governing board consisted of two appointees each from Bee Cave and Hays County and one from WTC MUD No. 5.

In June 2012, the WTCPUA began construction of the Bohl's $12 million sewage treatment plant after learning that the area's Lakepointe Wastewater Treatment Plant was nearing capacity, with costs adding to higher impact fees, Fox said. (See sidebar)

Contract issues

Fox said the number and breadth of the contracts are the problem between the WTCPUA and LCRA.

"We inherited 86 contracts from LCRA," he said. "We're filling in parts of our [contracted] service area not served. It's unoccupied land that's been turned into developments. We're scurrying around to get developers to lower their [water] capacity."

Developers said the Ladera, Sweetwater, Rough Hollow and Rocky Creek developments are expected to add more than 3,850 homes in western Travis County.

Both Burnam and Bunch said they share environmental concerns over new neighborhoods competing for the same groundwater. Burnam said Bunch contacted him about HB 890's effect on the Edwards Aquifer.

"There are environmental issues that transcend geopolitical bounds," Burnam said.

Cost to develop western Travis County goes north

In fall 2012, the West Travis County Public Utility Agency conducted a study that resulted in higher impact fees. Impact fees are charges new developments pay to the agency to enable it to recoup money spent setting up infrastructure in the area.

As of Nov. 1, WTCPUA water impact fees had increased by 45 percent for Hwy. 71 and 70 percent for Hwy. 290 districts.Wastewater fees went up 119 percent for the Bee Cave rate district, WTCPUA board President Larry Fox said.

"When a home is built, the developer is responsible for a one-time impact fee so existing customers don't have to pay them—the new development pays for itself," Fox said. "When the PUA took over, the board decided it was important to make growth pay for itself rather than make existing customers pay for it."