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Despite concerns, LCRA moving ahead on water-system sale

AUSTIN — Though a proposal by the Lower Colorado River Authority to sell 32 water and wastewater systems is meeting fierce resistance, the agency is moving ahead full-steam with its plan, officials said Wednesday.

“I believe the rationale for the sale of these water utilities is sound,” LCRA General Manager Tom Mason told the board during a meeting Wednesday.

 But Burnet County Judge Donna Klaeger, who is among a number of Central Texas officials concerned about the sale, urged LCRA to slow down and do a better job of communicating.

 

“The perception is — the decision was made very, very quickly,” Klaeger said at LCRA headquarters. “We respectfully request that it (the sale) just doesn’t move so fast.” 

But Mason said LCRA is only at the start of what could be a lengthy process.

“Despite rumors to the contrary — we have not identified a potential buyer,” Mason said. “We are at the beginning of a process, and we don’t know where it will go.” 

It may take as long as two years for the board to approve a purchase proposal from a single buyer or perhaps multiple buyers, Mason said. 

Also, the board has hired investment adviser BMO Capital Markets to receive “statements of interest” from potential bidders for the utilities, Mason said. 

LCRA officials will evaluate all potential buyers according to their finances, commitment to customer service, ability to follow environmental regulations and compensation to the authority, Mason said. 

“I believe the business procedure is appropriate,” he added. “I see no problem with meeting customer service demand or compliance with environmental regulation pending the completion of this process.” 

The authority does not know whether rates will go up or down after the sale, according to a statement prepared by LCRA officials.  

In the meantime, LCRA will maintain the systems.

“We are going to continue to operate these systems as if no sale is under way,” Mason said.  

The controversy stems from a decision Nov. 17 by the board to sell 32 water and wastewater utility systems, including several systems in the authority’s “Hill Country Region” which provide services to Burnet County.

Kleager, who attended the November meeting, said the vote came with very little public notice. 

“This (utility sale) is a very, very important subject, and yet, it was not on the posted agenda,” Klaeger said. 

And weeks after the November announcement, LCRA failed to notify customers of their plan to sell the systems, she claimed. 

“They were very concerned, and they were a lot of questions,” Klaeger said. 

LCRA officials have said they sent out a press release not long after the vote was taken.

However, LCRA board members denied her request to discuss the matter during the authority’s December board meeting, Klaeger said. 

Several county residents still want to know whether water utility rates will go up or down before or after the sale, and whether water quality will decline before or after the transaction, she added. 

“It is very important for us to put aside our differences and work together on these (water system) issues,” Klaeger said. “We do not want to go backwards — we want to move forward.” 

River authority officials say they have spent about $300 million during the last 10-15 years to upgrade and maintain the utilities. They argue the facilities have required millions of dollars in investments while costing more to operate than they provide in revenue.

LCRA does not want to go into deficit spending, and if the authority keeps the system, they will have to raise rates, officials have said. 

LCRA officials maintain their intention to sell the utilities has been a matter of public record since 2008. Indeed, six communities recently purchased utilities from the authority, according to LCRA officials. 

Before the November announcement, LCRA began sale negotiations with Hamilton Creek and South Road water system customers in Burnet County, also with other “customer governing bodies” in Bastrop, Travis and Williamson counties. 

Therefore, the November action by the board was a “natural extension” of existing LCRA policy, a spokesman said. 

Besides Hamilton Creek and South Road, LCRA has put several other water utilities in or near Burnet County up for sale, including Bonanza Beach, Lake Buchanan, Lometa, Paradise Point, Quail Creek, Ridge Harbor, Sandy Harbor, Smithwick Mills, Spicewood Beach, Sunrise Beach, Tow Village and Whitewater Springs, LCRA officials have said. 

Meanwhile, Klaeger urged the agency to be as open as possible about the sale.

“People do not understand what is going on,” Klaeger said.

raymond@thepicayune.com