Pflugerville approves resolution bringing 'fight' to water utility company

Council members said this was just the beginning of a long process they hope will eventually safeguard the nearly 5,000 customers who currently receive Winderemere water.

"This is just the very beginning of the battle that will be waged across the state by many cities to come," Councilman Wayne Cooper said.

Coleman said complaints about billing issues, poor customer service and the quality of water all added to the council's resolve to act on this resolution.

"We understand that this could be a fight. Your council walks into this knowing this will not be an easy road," Coleman said.

City spokeswoman Terri Waggoner said the goal was to step in and acquire the company.

"We have mentioned it to Windermere and SouthWest water, and so far that has not been well received," she said. "We're ultimately trying to take over."

Offer rejected

SouthWest Water Company, it seems, has been trying to avoid just such a situation.

The water company approached the city and made a revised offer about two weeks ago that the city rejected, City Manager Brandon Wade said.

"It actually is a proposal that would lead us to the same place that they're proposing right now, it would just take a different path," Wade said. "That's not a solution for our customers."

Wade—who said he has repeatedly made overtures to Windermere to purchase the water provider—said he was surprised by the offer.

"What's really concerning about that is that we asked and asked and asked them to work with us, and then just out of the blue two weeks ago they decided that they wanted to work with us," Wade said, adding that dialogue had been minimal until the offer came.

"We invited them to come to the meetings, we invited them to talk with us and that sort of thing. Their response to us every time was 'Everything you need to know is in that pile of books,'" he said.

SouthWest spokeswoman Janice Hayes released the following statement in response to inquiries concerning Pflugerville's resolution.

"Regarding the proposed STM [sale-transfer-merger] and rate increase, we recently presented a mutually beneficial resolution to the City of Pflugerville. On February 15, the company proposed a settlement for Windermere Utility that we believe is fair and reasonable," Hayes wrote in an email. "However, it appears the City of Pflugerville's leadership is going in another direction. We are still open to working with the City of Pflugerville on a settlement that is in the best interest of its citizens and our customers."

Wade said he would not provide specifics on SouthWest's offer.

Eminent domain

Pflugerville Resolution 0077 authorizes the use of eminent domain if a sale or more regional solution cannot be negotiated, but Wade said that would be a last resort.

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 to take over the water system.

Wade said, ideally, the city and Windermere would be able to reach an agreement that provides for a "truly regional approach to the distribution of water."

Taking over the utility would be costly, Wade said, and the money would likely have to come from the city's utility fund plus money borrowed through bonding.

"Financially, the city is willing to do what it takes to protect the city of Pflugerville," Coleman said.

The city would first have to go through condemnation proceedings to establish the value of the system before making any move to take it over through legal means.

Monarch rate case so far

Pflugerville has been a party to both Monarch's sale-transfer-merger case and the rate increase case—both of which affect a number of water systems throughout the state—since TCEQ took up the case in the fall.

Pflugerville initially voted to deny the rate increase in October, but TCEQ has final authority on any rate increases on appeal. That case is on hold pending the outcome of the sale-transfer-merger case that will determine if Monarch is able to purchase Windermere, among other water systems throughout the state.

Since then, the Pflugerville City Council has been adamant that it would do what it takes to prevent the rate increase.

"If it affects that part of Pflugerville, it really is a Pflugerville-wide issue," Wade said.