Travis County Commissioners Court
November 10, 2009,
Item A2
A2.
consider and take appropriate action on a resolution regarding the issuance of the river valley industrial development corporation revenue bonds (cross county water supply corporation water transmission project), series 2009 in an amount not to exceed $40 million dollars.
>> good morning,.
>> good morning.
>> how are you all doing this morning?
>> very good.
>> good.
>> okay.
this was on when we had three members.
and my office requested to put it back on today.
i understand that you all have met with members of the Commissioners court.
>> yes.
yes, judge, we have.
we have met with Commissioner Eckhardt and I called the other Commissioners' offices to see if they had any questions that I could further explain what the project is about.
>> okay.
any other questions for the representatives?
regarding this matter?
>> well, judge, I have -- I don't have any basic questions, but I would like to maybe commend them on such a terrific job that they have done in trying to accomplish, judge.
for many years we have struggled in this community, with water shortage situations in this part of the county.
we have had many economic development meetings, and within those meetings one of the concerns that -- that were brought up was that -- was that you can have the infrastructure but you have got to have some water
>> [indiscernible] all of these other kind of things, you have to have the water, you have to have the utilities, which is very critical for an area that is growing by leaps and bounds.
this particular 52-mile pipeline, originating all the way out in burleson county, crossing five counties, is a feat in itself.
but at the end of the day, this particular project will bring about some relief this that this community has been suffering for years with drought situations of -- of insurmountable approach.
i mean, just something that you just can't imagine.
this past year, just for an example, just to tell you how bad the drought was, we had person that's have came from Texas ag life, those folks that have come in to give us reports, to let us know how significant it was, you know, all over the state.
but in this particular region of Travis County, we -- we suffered a tremendous drought and we are still in a drought situation.
>> [indiscernible] things go bone dry, when you have folks in the area that have -- have -- an example of -- of having to -- to not even being able to support their livestock because of the loss of crops because of the shortage of water, those are indications that -- that it means to me that how can you support growth, whether it be residential or whether it be non-residential structures that -- that will appear, how can you support that without adequate water.
this is a shot in the arm of a long outstanding issue of bringing water to the community.
i have been involved, my office has been involved for a long time.
we've had meetings right here on this -- on this floor with several of the
>> [indiscernible] in that area trying to figure out ways of how we can make sure that the growth that comes to this area, how can we make sure that we have adequate enough water.
this land use, water, all of these things are very important.
but this is a shot in the arm for long, long, long outstanding issue.
of bringing economic prosperity to a part of the county that has desperately needed it for a long, long time.
i think the utility of water is monumental.
i don't care where it is but you have got to have water, you have got to have water.
so I applaud these folks, judge, and I -- I'm anxious to move forward supporting and passing this resolution, so I'm going to put a motion on the floor now.
>> no, sir, not yet.
>> not yet.
>> okay.
hold on, though.
>> all right.
okay, we do have joe and his staff here.
are you all here just as resource persons in case we have questions?
there's a resident on the back row who was here on this item.
second row now.
come forth, please, give us your name, we will be happy to get your comments.
>> I'm going to make that motion when it's appropriate.
>> and up be recognized to do so.
>> thank you, judge, thank you, I'm a little ahead of myself this morning.
>> give us your name, we will be happy to get your comments.
>> my name is justin spellman, I'm sorry that I don't have more polished comments, I just hear about this meeting at 8:45 a.m.
i'm a property owner here in Travis County.
i believe this is actually a vote against property rights in Travis County.
i think this water supply corporation and the way it was sheriff's department is a means to line the -- was set up is a means to line the pockets of a private individual to capitalize on the legislative process.
i believe that you all have the right today to help stop that extreme, outrageous fact because if you look at people that are supplying the water and who it's going to, look at the specifics on this deal, there's a lot of questions that we have.
if you look to the specifics of how this line is designed and the location and route of this line, I think that it's very clear that this line is not going from point a to points b where the water is coming from of point of where it is actually going to be utilized.
if you are trying to do something for a public purpose, you try to do it in the most cost effective way possible.
building a line between points a and point b through 16 other routes and, you know, tons of additional mileage of lines is not in the best interest of the taxpayer.
while they may not be using public financing for this, it's a matter that they need y'all's support to finance it in the way that they desire.
i believe it's inappropriate for the way that they are trying to do so.
again, you know, it's really something that takes more than three minutes to really get into all of the details, the fact of what's going on.
i come from a farming family.
i can understand the lack of water out there.
i myself had things go dry this year because of the drought.
i can tell you, also, there's no way that you can justify buying water from a entity like this for agricultural purposes.
certainly the purposes of this is for growth but at the same time the line that they are trying to put in is actually going to harm the people in the area where this line is actually supposed to be providing water and supposed to be providing a benefit for them in effect the way that it is structured is actually providing a great hindrance.
you know, for these property owners.
and it's a means to allow them the right of condemnation, to undervalue the impacts of putting this water line across properties.
>> thank you.
>> is this water -- is this water line designed to cross your property?
>> yes, property that is owned by family limited partnership.
>> okay.
>> okay.
would you all like to respond to those comments.
>> please respond to that question.
>> well, yes.
thank you again for the opportunity to have this item on the agenda.
the route thank we are using is based -- routing that we are using is based on easements that we have acquired.
the only item that really exists where we didn't go from point a to point b is around the mining area which is --
>> yes, my name is rich kaiser, I have been involved.
mr.
spelman is correct, the line doesn't go from point a to point b.
it would be nice to do it from point a to point b, but you have to take into consideration creek crossing, environmental issues, engineering design, topography, et cetera, et cetera.
in addition, we tried to align the pipeline along fence lines rather than trying to go through middle of everybody's property.
you cannot accommodate everybody in the pipeline alignment, but I would say that 95% of the right-of-way has already been acquired, hasn't been any condemnation, I think that we have been pretty successful on a 53-mile pipeline that has 166 landowners involved.
i think that we have been very successful in acquiring right-of-way and working with the landowners.
but again you can't accommodate everybody.
>> let me ask this question.
especially in the utility.
you have to have of course utility easement.
and what I'm hearing is that to acquire those utility easements, to run your pipeline, you have not had to invoke any type of condemnation proceedings.
if I'm understanding you correctly this morning.
is that correct?
>> that's correct.
>> okay.
and you have acquired 95% of the properties that's necessary to complete -- to complete the -- the -- the length and the -- of the particular pipeline so you are 95% there and that means that you have a few other that's you are working with I guess at this time to bring forth closure.
but none of them have been under the -- under the auspices of condemnation; is that correct?
>> we have not condemned any properties, that's correct.
>> okay, all right.
all right.
>> mr.
spellman is concerned about his and his family's property.
>> yes.
>> I have met --
>> how do you deal with that--
>> for the record, how will his family's property be affected by this project?
>> well, I think mr.
spellman needs to speak for himself on that, but there will an pipeline going through his property.
i believe we tried to accommodate --
>> so he's indicating today that he and his family are not motivated to sell.
so are you saying that you will condemn the property on his land necessary to complete the project?
>> that decision hasn't been made yet.
we are still trying to negotiate with mr.
spellman.
>> he wants to be assured today that you will not do that.
and -- you are saying --
>> I can't speak for the board of directors of the cross county water supply corporation.
>> judge, we have gone around property owners when it's feasible and possible.
there is a lawsuit in burleson county right now with the landowner that we received a court order so we could enter the property to evaluate the property.
that property owner counter sued.
saying we didn't have the right to do that.
we actually dropped our suit and rerouted around that property owner to avoid that controversy.
if it's feasible to route around a piece of property, we will do that.
if not, I mean, cross county water supply corporation does have right of eminent domain, we have not used it yet.
we don't want to use it.
we would rather negotiate with the property owners, we feel it's a better way of doing it but we do have that authorization or authority to do that if we had to.
>> where is the project without Travis County's support?
>> what Travis County support right now is dealing with the debt financing.
>> where is the project without the Travis County support?
>> without Travis County support on the debt financing, we would have to go another route to receive -- to get financing.
>> you would just go to the open market to pull down capital the same way as a for profit entity would?
>> well, unfortunately, the economic times that we're in right now that is not that easy to do.
that's a very difficult situation to be in right now.
which the other side affords us the opportunity to finance the way we are right now because there are not a lot of entities going out seeking these capital funds to do projects.
>> although I understand there's at least one other venture that's very similar to yours trying to pull in a pipeline from bastrop county.
>> [indiscernible]
>> frank -- I don't know where he is with his financing at all.
>> this is a fairly competitive field bringing in a pipeline to bring increase the water, you all aren't the only entity, the only venture that is putting projects together like this, correct?
>> you are 100% correct.
we have offered to mr.
-- now, remember cross county is the pipeline.
we have offered to mr.
limmer capacity in the pipeline so he could transport water to his end user through the pipeline.
we are strictly talking about financing for the pipeline.
>> although the pipeline is designed, since it begins in the well field in the blue water well field in burleson county, correct?
>> yes, ma'am.
>> and it --
>> and if I could have carol talk a little bit about the financing, these are private activity bonds and carol has been dealing, herb, has been dealing with these for years, if you give her the background and history of what private activity bonds are used for.
>> I'm sure many members of the court are familiar with this type of financing.
in general you may see it more in the corporation for manufacturing facilities.
we've obviously done financings over the years for many fortune 500 companies under federal tax law.
it is tied to the type of facility, whether it be pollution control facilities, in this instance furnishing water to the general public, manufacturing facilities, airport, stock
>> [indiscernible] all of those are authorized under the federal tax law for use for Texas increment financing for private company because those types of facilities they are trying to -- to allow for lower interest costs to -- to act an city of san antonio.
act -- act as an incentive.
>> there's no doubt in my mind, I 100% with what Commissioner Davis said with regard to the -- to the public benefit that would be derived from this line, there no doubt in my mind that there's a great public benefit.
the doubt in my mind goes to whether there's a public purpose.
and because of the way that the pipeline is designed, it's designed to -- to -- to primarily serve blue water and considering the capacity on the line in comparison with blue water's pumping permits, permitted pumping capacity, it seems that the project is primarily designed to serve a necessary business expense of blue water.
>> let me say this, I'm just going to hit the nail right on the head.
i am interested in getting water to precinct 1.
we have people that -- let me give you an example.
there has been such a significant increase in water rates out there.
to the homeowners.
we're talking about serving the cities of manor, we're talking about serving the area of Pflugerville, we're talking about an area that has been deprived of economic development based on infrastructural shortfalls.
now, if this is the way to get there, fine.
if he this can negotiate with this gentleman here, I think they have gave examples of working around areas of those persons that don't want them on their property, there's a way to work around that.
they have done that by example.
if you don't want the pipeline coming through your particular property, I'm understanding them that they can work around it.
what I'm trying to resolve is economic viability, stable -- stability of a community that has not had equal access, equal opportunity for years in this community.
now, we have a chance to rectify that now.
we have a chance to do something about it now.
today.
and as I stated earlier, I have visited this water issue for years since I've been here.
judge was -- was involved in a water issue years ago dealing with kennedy ridge, an example.
we just recently dealt with plainview estates, water issues for residents out there in -- that doesn't have access.
don't have access to water.
we're talking about here that will bring water in, that ccn -- those people that don't know what c -- certificate of convenience and necessity, sorry, those the jurisdictional boundaries that those folks will be able to bring water so those ccn's can continue to have a healthy supply of water for future growth.
this is what we're talking about.
are we going to deny this area for future growth?
is this what we're trying to do here.
>> no.
>> are we going to deny the economic development and economic ability of an area that's been desperately needed since I've been here?
the judge even with kennedy ridge, we wrapped it up where kennedy ridge has some water.
there are still outcrops of areas that still need water.
now, I'm going to support this.
i'm going to fight tooth and nail as best I can.
i'm not going to cut the throat of people in precinct 1 or eastern Travis County east of i-35 that have continually begged for equity.
this is an equity issue.
among a lot of things, to bring about some economic development that has been long overdue.
we did something recently, we -- let's put all of the pieces of the puzzle together.
this court and this -- the voters of this community in 2005 said listen, Commissioners court, we trust you to go out and do certain things with this bond initiative.
we want you to get open space, parks, we also trust you to do the fact of bringing some if you are -- building from infrastructure with some roads.
we had the largest bonds issuance I think in the history of Travis County with the last 2005 bond election.
but by doing so, we were able to just tap a lot of projects.
one east-west thoroughfare, for an example, of howard lane.
howard lane 1, howard lane 2.
at east-west connect is made, when it's made and become a reality, then we will have a connection from -- all the way from mopac, loop 1, all the way to s.h.
130.
that is that portion of the infrastructure.
however, we are lagging behind on some things that we need as far as water is concerned.
that's another infrastructure, too.
if these folks have had the reputation of working around folks, to avoid condemnation, and if they can be an agreement, that has been some of the instances that has happened, then allow them to work together, but I understand that they have -- they have worked with 95% of these and there's a few properties I understand that they haven't worked with and haven't come to a final agreement.
i don't want to hold them back to bring a relief factor of some things that has not -- not been possible for us to get over there to make our economic development and make the -- make the non-use of development -- of residential and non-residential development to take place over there as it should.
as it should.
manor, Pflugerville, all of these other areas that have water, need capacity stuff like that, have open arms, how can we turn them down and it is for the public good.
because the public -- the real public -- I don't know -- the real public just like everybody else in this community.
east of i-35 is public!
they pay their taxes just like anybody else in this community.
dadgum it I'm going to fight for it as long as I'm here for precinct 1.
i'm going to do it!
i have said my two cents, I'm going to make a motion and see what everybody else think about it.
>> you all have been negotiating with the spellman family, I take it.
>> yes, sir.
>> yes.
>> but you have not been able to reach agreement.
>> no, sir.
>> okay.
so how much of their property will be affected by the water line if you build it as designed now?
>> just, I don't know off the top of my head.
it would be a permanent easement that would be about 50 feet wide out, I'm not sure what the lent of that easement -- length would be.
mr.
spellman may know.
>> [one moment please for change in captioners] is.
>> all I could say, judge, we could go back and take a look at it, but it would also require getting additional right-of-way on other people's properties which obviously adds to the domino effect.
>> we will certainly look at that, judge.
>> with the other ventures that are out there, I believe that it's important to maintain a competitive level playing field for the market since this is -- I'm correct in saying that this is unregulated wholesale water so it will be sold at whatever the market can bear to eastern Travis County residents.
>> well, that's true, but the -- there is an existing contract between blue water systems and southwest water, and southwest water currently serves hornsby bend, kennedy ridge and the four manor m.u.d.s so this is not only a new source of water, but it will replace the existing water source that severely hurt with the drought and, you know, there's issues --
>> but that wasn't my question.
my question because it will be wholesale water that is unregulated and can be sold at whatever the market can bear.
is that a true statement?
>> it would be negotiated, right, you are correct, with the ccn holder.
>> and Commissioner --
>> hold on.
i'm not done yet.
i asked a question and got an answer, that was great.
but one issue that I'm keenly aware of is it is important for us to let the market operate, to let the market operate so that there is sufficient competition to keep the wholesale rates at a level that eastern Travis County residents will be able to afford.
and I'm loathe to wade into this as a governmental entity and provide a preferential tax treatment to one which creates a disadvantage to others.
by doing so, the market seems to be working optimally under this circumstance.
there is a supply in burleson and bastrop.
there is a demand in travis.
and there are at least two ventures that are -- and I believe there are more, that are attempting to bring this ample water supply from other counties to a -- a county that has -- has issues with water supply.
that's market working as it should.
and I don't see any deficiencies in the market or disincentives for laying this pipe, and therefore I don't see that the government should wade to create a preferential tax treatment for what is, as I said while it does have public benefit, I don't believe that it has at its core a public purpose.
>> beg to differ, but that -- you've heard me.
>> Commissioner, let me correct a couple of items.
first of all, yes, there are other entities trying to do this.
none of those have acquired on water source so date, none of them have permits from ground water conservation districts.
that it is if first issue.
the second issue is current contract is in place --
>> you would create a monopoly in blue water in eastern Travis County?
>> no, what I'm saying is I have been developing safe water supplies my entire professional career.
i'm very involved with the issues in eastern Travis County, the water shortages, the overdrawing of the edwards aquifer, and this project offers a potential solution to that.
>> but our decision today is not over whether the project is good or bad.
i believe the project is wonderful.
our only decision is whether or not you will get preferential tax treatment on your bond issuance, which is a very tiny issue.
and I am willing to bet that even if you don't get the preferential tax treatment that you will be coming to Travis County anyway because blue water has a tremendous amount of water and we have a tremendous market for that water in Travis County.
so I think you're coming anyway even if we don't vote in favor of preferential tax treatment for to bond issuance today.
>> well, I guess there's a couple of issues, and one where ridge talks about -- the other opportunities out there for these other entities if they ever come to fruition that are a lot further away than we are right now.
it could be a minimum of five years before they would even be able to go forward with it.
probably ten years before they could even get water in Travis County.
i don't know if Travis County can wait for ten years.
the other issue is with -- obviously with tax exempt financing, the rates are going to be lower to the end users in Travis County.
granted, if we have to go out and get rates off the market --
>> or profits will be lower for blue water.
>> those rates to Travis County end users will be higher because the cost -- the carry cost of the financing will have to be paid for by somebody.
so I -- there are other organizations out there trying to do this.
whether they are able to pull it off is questionable.
and whether they are able to do it timely is even harder to prove.
>> let me ask you this.
on the debt cost, you say the debt cost will have to be paid by somebody.
i 100% agree.
that somebody is either the purchaser at the end point or it is the purchaser of the capacity at the beginning point.
am I correct?
>> uh-huh.
yes, correct.
>> so your statement that it will have to be paid by the end users is actually a mischaracter station.
>> well, the end user being whoever uses the pipeline.
the water supply corporation does not sell any water.
they are just a conduit pipeline.
>> but the individual or the entity that will have to pay the higher debt costs will either be the end user at the end of the pipeline or the beginning user.
>> actually it would be the beginning user.
the supplier of the water is going to have to pay for the pipeline.
>> Commissioner huebner.
>> first I want to say that I'm with Commissioner Davis and the need to get affordable and reliable water into owner Travis County.
and I can see perhaps a pricing advantage by the use of the nonprofit to create the pipeline.
however, I am concerned about the long-term competitive pricing structure for water if this ends up being the only pipeline that's being utilized.
and on your statement pipeline project capacity, you make the statement the 50% of the pipeline capacity available to additional and existing participants.
can you more specifically define participants?
>> in that the participants today or the future participants?
>> both.
>> okay.
participants today is blue water.
they own 50% of the capacity and the pipeline, 50% going forward is any supply water source can utilize that pipeline.
the pipeline is considered a common carry pipeline.
>> okay, the 50% going forward, is that engraved in stone?
will that always be available to sources other than blue water, or is that likely to change?
what's the --
>> it's if available.
>> if available.
>> yes, ma'am.
>> so if blue water comes online first and ends up selling the entire capacity of the pipeline, then that would preclude other water sources from using the pipeline in the future?
>> yes, it could.
once the capacity is used up, there's nothing more we can do about it.
for example, a portion of that capacity right now is owned by the city of Pflugerville.
so the city of Pflugerville can transport their excess water through that pipeline.
that agreement exists today, and that agreement is actually between cross county water supply corporation and the city of Pflugerville.
>> so what you're saying then is it's possible in the future that the blue water use of the line could essentially carry a Monday monopolistic capacity on the line.
the opportunity for competitive pricing through this line would not be there.
>> well, and I guess, to go back a little bit, to get into a venture like this is extremely risky and very expensive to get to the point that we are today.
i believe blue water has probably expended somewhere up to $16 million.
today they are paying approximately a million eight a year to the underground district on fees they are paying today, and they have not sold a drop of water yet.
so it's not for the weak of heart.
this project is a very expensive endeavor.
and just by sheer nature of that limits who could or could not get into this type of a business.
>> I'm talking about the ability to have competitive pricing between other providers on this line.
>> may I speak to that?
>> surely.
>> the current contracts that -- for selling water have a very important clause in them, and that clause is that the price can be set now and over the next 20 to 30 years, depending on what the buyer's requirements are, and the only increases would be cpi increases.
now, if you look at water rates across Texas and throughout the united states, the -- the water rates or the costs of water have been going up dramatically, much more than the cpi.
so with regard to competitive rates, if anyone were to want to lock in a price with the only increase in price in the cpi, they could do that today or in the future.
and that holds the price so that no one is held hospital stage by any one water provider.
in addition, there is a competitive market out there with regard to city of Austin in some instances and others.
>> that's the contract today.
what would keep you from changing that contract structure in two years, say?
>> nothing.
other than everybody would see the contracts that exist today and want the same thing and it would be negotiated.
>> every opportunity we've had today we've gone out and talked about it minimum of 20-year contract with the fixed price today.
which is one of the nice -- nicetys about doing that contract and because what ridge the talking about the price of water continues to escalate, so --
>> in the open market we say sorry, the sale is over.
i mean how -- I don't see a confirmation that you might not change the contract.
>> we have no intentions of changing the contract.
i mean I can't guarantee you today that ten years from now we'll have the same contract, but going forward, I would imagine ten years from now all the capacity in that line will be gone.
once that water comes to Travis County, I think there will be a lot of people that needed this water this year that would have already been gone.
>> of the existing participants, what percentage have water coming from somewhere other than the blue water?
>> they all do.
you know, the participants right now is southwest water company is the main one.
southwest water gets their water from the alluvial wells towards the hornsby bend area.
and their customers in hornsby bend, kennedy ridge, and they proceed wholesale water to the four manor m.u.d.s north of 290.
city of manor is another customer.
city of manor gets their water from their own alluvial wells, plus they are getting water will you manville supply corporation.
the orient tilt we are negotiating with is manville water supply corporation.
they currently get their water from their own wells.
>> and what percentage are coming from manville and southwest right now?
of the capacity?
>> blue water has capacity for 9 million gallons a day.
they have a current contract with southwest water which is a take or pay agreement for three million gallons of water a day.
we are negotiating an agreement with manville for five million gallons a day.
up to five million gallons a day.
that's a value you metric.
that means they -- volumetric contract.
there's a half million gallon agreement with city of manor and there's a half million gallon agreement to transport with the city of Pflugerville.
>> I'd like to point out that both manvel and southwest are alluvial aquifers which are not like the -- there's uncertainty on the available supply from those resources.
>> yes, ma'am.
>> it definitely is, and remember, recall that part of the
>> [indiscernible] that we've been running to with issues take came before the court was dealing with that alluvial aquifer, which is really not a reliable source of providing water and with southwest formerly hornsby bend having to supply not only those particular entities but Austin colony is another recipient.
you get down so deep and the water is not there, you are going to have to do something to get some folks some water.
let me ask this question.
judge, am I next in line?
>> yes, sir.
>> okay.
thank you.
let me ask this question.
if the court with decide to approve this today, the resolution, you move forward, river valley development corporation to issue revenue bonds through, of course, use the cross-county water corporation, water supply corporation, rather, if this was to be approved today, in the vehicle of a resolution, and I do know there are still a few outstanding issues as far as not being able to bring to closure at this time but working on those things to bring to closure some of the right-of-way acquisitions situations, utility right-of-way acquisitions on properties, how long will you think it will probably take, ballpark, if you was to look in your crystal ball, and I can go out and holler at the folks over there, big press conference where there will be a point where the pipeline comes in and folks are jumping for joy, thank goodness we probably got water over here?
you got some kind of time line on something like that?
>> yes, we do.
the current project schedule would have water delivery in early spring of 2011.
>> early spring of 2011.
right around the corner.
so that was my final question, judge.
>> okay.
Commissioner Gomez.
>> I think -- I mean I can see the great thing that would come from having water for that part of the county.
the other thing that -- that we can also think about is would there be some jobs generated as well with the construction of that pipeline and at least in the Travis County area?
>> there would be several things.
there would be, one, some jobs created.
two, some subcontracting and building of fences, trenching, things like that.
>> hauling?
>> hauling, to local companies and expenditures, hotels, restaurants, gasoline, things like that.
there would likely also be a small amount of permanent jobs.
>> and would you all be amenable to working with Travis County?
we have hubs that are signed up who can do some of those jobs.
probably from hauling all the way up to, you know, some of the permanent jobs.
>> yes, we could look with regard to the general contractor using some local hub contractors.
>> would that be part of a contract, judge, that we would then have at some point?
not only to deliverables, because I am concerned about the water rates that something be put in stone that would kind of make sure that we don't have folks lining up with a monopoly on them and being able to charge whatever because, you know, who else do you turn to.
because I think if we pursue that as well as maybe the creation of some jobs, we have hubs waiting to do some jobs, and I think we can probably find some very good people for you.
so those two issues would be important to me for us to kind of nail down a little bit so that we can all be winners.
>> mr.
spillman.
>> yes, sir.
i would just like to make a couple points.
one is that unless they agree with manville to actually sell water to manville and at reasonable rates, the first thing we asked them when they asked about coming across our property for easement, are we going to have access to water in the line and we were not guaranteed that based on the fact they are the wholesale provider to the ccn holder.
i want water in that area as much as anyone else doing, but at the same time we're talking about a water transmission line and not a water service line.
we're talking about a line where you can -- you know, they told us three foot or three and a half foot line going through the property, that you can't -- you know, even though water is there, you as landowner don't actually have the right to tie into that.
that's where you have to step up to the ccn holder to talk to them or establish your own m.u.d.
to be able to provide water to buy from them.
in which case you are dealing with a monopoly because they are the ones that have the water going through your property.
so it reduces the bargaining power.
that's where, you know, we are negotiating with them, we have outside attorney who I contacted briefly before the meeting that was unable to -- to meet here on short notice when he found out about it.
but you know, we want to work with them.
we've asked them if they could go around the edge of our property the same way they went around the edge of the property with the city of Pflugerville where Pflugerville is putting a wastewater treatment further downstream.
they denied our request.
and that's something where if look at it on the map and look at the specifics, they are saying, well, they have 95% of the easements signed up.
a lot of that is due to the fact they put this line along the lcra power line where a lot of landowners say I already have a power line going through my property, what difference does it make if I have a waterline going next to it.
but the main issue is the fact that if you look at the map and see where they exactly laid this thing out, we were told originally the distribution point, the end spot for this waterline that they were going to build was basically underneath the lcra power line east of cameron road and north of schmidt lane at a point there is no user.
we were told that the users down in manor were going to build their own line to connect up to that initial distribution point.
and then somewhere in the process those developers that wanted to use the water downstream decided, well, look, why don't you as the wsc build that whole complete line.
and I think that's a lot of why the routing of the line takes the form that it currently takes compared to if they would have looked at this and said how are we providing for this public service, they would have said, well, look, we can get from point a to point b a whole lot more effectively from a long-term vantage point than what they are currently doing.
i apologize for not bringing the maps because I think it would clearly show the fact this is not, you know, a public purpose in the sense that a typical water supply corporation is.
this is a wholesale water supply corporation providing to the different ccn holders, but just because this line goes through our property does not mean we're nextly going to get water from it.
Commissioner Davis, that's my concern as a landowner.
i can understand where you are coming from, but, you know.
>> and believe me, I understand where you are coming from because if -- you know, and -- under the -- of course, we know state condemnation, condemnation proceedings, we're not going to talk about that, but there may be -- and I can't speak for them, but there may be a possibility where owners of property that the line -- the utility easement comes through their property, there may be circumstances that they -- and I don't know, I can't speak for them, where they will allow a hookup to that.
i don't really know, but that's something that the owners of the line would have to discuss.
but if that's something possible, maybe they can work something out like that.
i don't know.
>> may I speak to that?
>> okay.
>> we've had a number of requests of landowners on the pipeline that wish to tie into the pipeline.
this is going to be a tceq approved public water supply line.
and because of that, individual entities, landowners are not allowed to tie into the line per state regulation.
>> oh, okay.
>> only other s.e.c.
-- tceq.
>> you wholesale to retailers basically.
>> yes.
>> on the last page of your handout, there are seven listed, but you mentioned some others like you mentioned southwest, which is not listed here, and manville.
so when you list these participants, they are participants in what manner?
>> southwest, judge, is actually the owner of hornsby bend.
>> okay.
>> it's a publicly traded company on nasdaq exchange, so they own hornsby bend utilities.
>> where is manville?
i see manor, windemere.
>> and that's because we're negotiating with manville.
it's not a signed agreement.
>> okay.
>> but your goal is to get as many water retailers as possible on contract and you sell your capacity to them and they turn around and sell it to customers.
>> yes, sir, that's correct.
>>
>> [inaudible].
>> Commissioner hueber.
>> these contracts that you are writing with these providers what are in the alluvial aquifer, do they include an option to buy blue water at some point in the future if the alluvial is not producing during a drought period?
>> we've actually done two type contracts.
this contract with southwest water is a take or pay, which pretty much says regardless if they can use the three million gallons a day, they end up having to pay for it.
and that's critical to our debt financing because we pledge that agreement to cover the debt financing.
the other agreements which are with the city of manor, the item that we're negotiating with manville water supply corporation, are more volumetric-type contracts and they pay for whatever water they use up to the amount that they are contracted for.
example is the city of manor has an agreement right now for half a million gallons a day.
if they don't use any water, they don't pay anything.
if they use up to a half million gallons, then they pay for the half million gallons they use.
if they want to go above that half million gallons a day, as long as there's excess capacity for the water, they can do it and they pay the same rate.
there's not a penalty for exceeding that as long as that capacity is available.
>> anybody else here on this item?
if you are here on this item and would like to give comments, now is the time.
please come forward.
have a seat.
>> do I sit up there?
>> yes, sir.
these four people are not as mean as they look.
if you give us your name, we would be happy to get your comments.
there are two chairs on the end down here.
they may get mean if you start taking their seats.
>>
>> [inaudible] since this is a --
>> speak in the microphone.
>> I think this is a 20-year solution.
>> name.
>> john daskota.
i think in 20 years we're going to be sitting here having this conversation again debate the price of the water and we're not going to perceive the bottom line if this man doesn't want it and this is his land and they are not going to give him access.
>> what tceq --
>> I've approached in southern Travis County and I just -- they don't have my highest of admiration right now.
>> off the record I could say some things too.
>> [laughter]
>> I think that -- I think that, you know, the fight for nature preservation and private landowner's rights is something that in the state of Texas right now we really need to -- with toll roads and whatnot, we need to step back and take an eye at what we're really doing.
you know, so that's my opinion.
>> okay.
so you are here as a private citizen just interested in this item.
>> I just happened to walk by, I heard something about veterans and I stepped back in.
>> okay.
thank you.
>> thank you.
>> anybody else on this item?
okay.
Commissioner Davis.
>> yes, judge, I move that we approve item 2, and that is with the river valley develop development corporation to issue revenue bonds under this particular resolution dealing with the cross country -- cross county water supply corporation to carry out this -- completion of this 52-mile project, and that they continue to work diligently to resolve the unsolved or continue the negotiation with those particular property owners in which they have not acquired right-of-way acquisition at this time.
and so that is the motion that I'm putting on the table.
>> I'll second that, Commissioner Davis, if we also put on there about the jobs that can be created in Travis County for hubs.
>> and that will be a lot of -- a lot of -- we do have a lot of folks that needs work.
so if there is any way possible that you can include the motion to include that the jobs that are created, we will like to know that and if you can help in that regard, we would like to include that in the motion if you can make that available to us.
>> okay.
>> that's friendly, Commissioner Davis?
>> yes, it is.
>> I have an interest in no condemnation of the spillman land if feasible.
or working with the spillman property owners to reduce the impact on their property.
i realize that sometimes as a last resort you have to condemn, but there's condemnation and there's condemnation.
so if you really have to, then you try to work with them to reduce the impact which means the minimal adverse impact as possible.
>> we will and will keep your office abreast of how the negotiations go.
>> I except that as friendly.
>> is that friendly with you, Commissioner Gomez?
>> yes.
>> any more discussion of the motion?
>> would you consider it a friendly amendment to add that 50% of the pipeline capacity remain available for nonblue water water sources?
>> 50%?
for how long?
>> in order to ensure competitiveness in pricing in the future.
>> I'm not following you.
sorry.
>> in other words, if blue water ends up being the sole source of water going through this pipeline, then they hold a Monday monopolistic pricing on the water.
if a portion of the pipeline is reserved for sources of wholesale water other than blue water, then that allows competitiveness to remain in effect for the long-term pricing of the wholesale water.
>> can we speak to that?
>> before you respond to whether it's friendly, what impact would that have?
>> we couldn't go forward with the project unfortunately.
you know, there's a chance that nobody would ever take that other 50%, and the project can't afford to go forward with just having 50% of the capacity being used.
if that were the case, we would lower the volume of the pipeline from 30 to 15-inch.
>> what percentage would you be willing to reserve back for users other than blue water?
>> really, it's -- you are reserving it, but there is no guarantee it would go forward.
if we had a deal --
>> you've already said with --
>> let him finish.
>> if there was a situation that within five years somebody didn't come in and take that up that we could use, but I mean you are putting handcuffs on the project by doing that and we probably couldn't even go forward with be able to do that unfortunately.
>> I definitely don't want to put handcuffs on the project.
>> I would also say it's not monopolies stick because it's a wholesale water supplier.
all these ccns, they can develop their own project, others can do it also.
so what we're really trying to do is solve a problem that exists now with the hornsby bend area and bring some safe, reliable water in.
>> for example, manville water supply corporation is looking at this as their long-term solution instead of them having to spend capital and develop their own wells and get their own permits.
they are looking at this as their resource going forward to grow their area.
and you know, the amount -- the volume of the water that we're using today for blue water for these existing customers, if we were to limit that volume of water, we would not be able to provide water to them not future when they grow.
>> is charlie pretty much involved with you all from manville on this?
>> yes, he is.
>> he's a good man.
>> he is.
>> real good man.
>> anything else on the motion?
the motion was two friendlys.
you got both of those and -- well, greatly minimized to the extent possible.
anything else on this item?
any discussion?
any discussion of the motion?
all in favor?
show Commissioners Davis, Gomez and yours truly voting in favor.
Commissioner Eckhardt and Huber voting against.
>> we're going to have a press conference.
let's get some water in Travis County for future prosperity, future development.
>> thank you very much.
i appreciate it.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Tuesday, November 10, 2009 1:40 PM
