A new water contract with Liberty Hill will inject approximately $500,000 per year into Leander's utility fund.

Leander City Council agreed Aug. 1 to transport and treat up to 600 acre-feet of Liberty Hill-owned water from Lake Travis. Liberty Hill elected officials have already approved the 50-year deal, enabling the project to proceed immediately, Leander City Manager Kent Cagle said.

"This is a very beneficial agreement for both cities," he said. "We can generate some revenue now and in future."

Liberty Hill has no water treatment facility or water pipeline system to transport water from Lake Travis, while Leander has a treatment plant and excess water capacity within existing infrastructure to easily accommodate its northern neighbor, Cagle said.

As part of the deal, Liberty Hill agrees to construct a water pipeline from Leander city limits at Bagdad Road to CR 280. In exchange, Leander will pitch in $200,000 to make the water pipeline 16 inches wide—four inches larger than Liberty Hill would cover financially—to allow excess capacity as Liberty Hill grows. Money collected from Leander's water impact fees will be used to cover that cost, according to Leander city documents.

The 600 acre-feet of water, available to Liberty Hill since 2004, will be used to help the city accommodate future growth. The city currently relies on a well water system.

"Their wells just cannot keep up with the growth and demand," Leander City Engineer Wayne Watts said previously.

And while the deal may not allow Leander to decrease its water tax rate—the highest in Williamson County, it may prevent future increases, Councilwoman Michell Cantwell said.

"I was very pleased we were able to secure this deal," she said. "This is really good for the citizens and the city of Leander."