CENTRAL TEXAS WATER TUG-OF-WARS

#1 The Hays County/Forestar Agreement 

We have all heard "Whiskey is for drinking, and water is for fighting."This comes from the history of the Western states when water was so obviously the lifeblood of ranching and farming, and rules were few and far between. Water rules and laws are now in place, but water is still our region's lifeblood, and the water tug-of-wars continue.

 

CARD sponsored a "Water Crisis" Community Meeting on September 11th this year to give the big picture about water issues locally and across Texas, along with useful information for personal water use. Feedback from the meeting indicated that people are eager to learn more about water issues, especially local issues. This is the first of a series of CARDtalks on topics that are current and relevant to our area.

 

The Hays County/Forestar Groundwater Reservation and Purchase Agreement

 

Hydrogeologists - who study underground water specifically - have known for many years that the Carrizo-Wilcox Aquifer that lies east of IH 35 in Burleson, Lee, Bastrop, Caldwell, and Gonzales counties, has a large amount of untapped groundwater. Private water marketers, anticipating a future desire for new sources of water in growing Central Texas, approached landowners in those counties and secured leases to pump groundwater. These leases would be subject only to reasonable regulation by the local groundwater conservation districts that issue permits for pumping.

 

Explosive growth is expected in our area, South Central Texas, over the next few decades. Population projections show this region passing 3 million inhabitants by 2020, and going over 4.3 million by 2050.* On April 24, 2013, the Hays County Commissioners Court embarked on an ambitious plan to secure "new water" to meet the future demands of growth. Hays County initially developed a "Request for Proposals" asking potential water suppliers to submit proposals for providing 25,000-50,000 acre-feet of water per year to Hays County. An acre-foot of water is 326,000 gallons. The only responder to the Hays County request was Forestar Real Estate, an Austin-based water marketer. Forestar had purchased water rights in Lee County about 65 miles east of Hays County and proposed to develop a well field to pump 45,000 acre-feet (14.6 billion gallons) of groundwater each year and sell that water to Hays County.

 

Hays County accepted the Forestar proposal and negotiated a Groundwater Reservation and Purchase Agreement that was approved by the Commissioners Court on Oct. 1, 2013. This agreement was subject to an opinion from the Texas Attorney General assuring Hays County that it had legal authority to proceed with the agreement. The AG declined to issue an opinion. However, the Hays Commissioners Court proceeded anyway, following the legal opinion of its staff attorney.

 

Meanwhile, the Bastrop/Lee County area Lost Pines Groundwater Conservation District has permitted only 12,000 acre-feet (about 3.9 billion gallons) a year to Forestar. Lost Pines believes, based on its hydrologic studies, that any pumping by Forestar greater than the 12,000 acre-feet per year will deplete the aquifer over the long run. Forestar is now suing the District and its individual directors to get the full amount requested - 45,000 acre-feet per year.

 

The Hays-Forestar agreement, as finally amended and approved by the Commissioners Court on May 13, 2014 by a 4-1 vote, requires Hays County to pay Forestar $1,000,000 for year 2013 (already paid) and $400,000 in subsequent years to reserve permitted (12,000 acre-feet) and unpermitted (33,000 acre-feet) groundwater. The current agreement anticipates that the $400,000 reservation fee will be paid for five years or until pumping and purchase of water actually begins. The $400,000 reservation fee is just an option fee and does not reduce the cost of any water that Hays County may ultimately purchase.

 

Currently Hays County has no customers for this water, and the payment to Forestar is coming from general tax revenues, not from utility customers. This means that Hays County taxpayers will be paying two bills for water: one to Forestar (from taxes paid into the Hays County general fund) and one to their present water supplier or - if they don't have a water supplier - what they pay to build and maintain their private well or rainwater collection system. Therefore, Hays County taxpayers will see no benefit from the Forestar water reservation agreement.

 

What is essential to understand is that if Hays County, in some future year, actually gets the water, there would be a far greater additional price for delivering the water. The County, or some other entity, would have to build a large pipeline approximately 65 miles long to deliver the water to Hays County water customers. The cost of this pipeline would likely exceed $300 million for construction, plus additional and ongoing operating expenses.

 

In a separate but related exercise, Hays County Judge Bert Cobb has held a series of meetings with officials of other counties seeking partners in this Hays County water enterprise. He wants to create a "Utility Development Corporation" (UDC) in partnership with several other counties and develop a plan and agreement for utilization of this Hays County reserved water. So far, no other county or entity has agreed to join with Hays County to form the UDC. (There is yet another development - A recently-disclosed proposal on the November 18th Hays County Commissioners Court agenda would have allowed the creation of a "Central Texas Water Development Corporation." The proposal failed, 3-2.)

 

All of which makes this plan an expensive "wait and see" proposition for the Hays County Commissioners Court.

 

Hays County citizens should be aware that enterprises such as this could dramatically increase the cost of water and burden the water system's owners and customers with large long-term debt and operating costs. CARD believes that the Commissioners Court, in coordination with other area governments and water purveyors,should develop a Regional Water Plan that shows the public the real costs of such new water supplies and also shows whether the impacts it will have on the Hill Country and its aquifers are sustainable.

 

CARD also believes that any groundwater pumping in central Texas must be done on a sustainable basis. That means the amount of groundwater withdrawn from the aquifer does not exceed the amount of recharge of the aquifer based on the best science available.

 

 

*State Regional Water Plan for 2016, Region L

 

 

 

CARD Steering Committee