How the WSWSC Formed
LCRA acquired the WWS system in 2003 from Merchants Bank. The bank also provided LCRA with $110,000 to offset future costs. In 2010, LCRA announced they would be selling 29 water, wastewater, and intake barges, the WWS system included. LCRA initially preferred a “one buyer” to recover as much of the $300 million they had invested and the monthly $300,000 operating loss.
The members of WWS quickly realized that if our water system was sold to a for-profit company, the capital recovery costs would be passed along to our members as fees, as much as $150 per month in addition to water usages charges. Aqua Texas was one such for-profit companies bidding for the LCRA water systems “package”. With a BBB rating of D-, you can read the many negative Aqua Texas customer reviews.
In response, many concerned WWS residents organized a “coalition” that included representatives from other LCRA affected systems. They formed the Coalition of Central Texas Utilities Development Corporation (UDC), a legal entity with the ability to obtain financing and transact business. The UDC would operate as a “pass-through” entity; after purchasing the water system “package” from LCRA, the UDC would sell the individual systems to its stakeholders (Eg. the WSWSC).
Then, LCRA moved away from their original “one buyer” policy and in March 2011, we were invited to submit a proposal for the acquisition of the WWS system alone. In order to participate in the UDC proposal and to interact with LCRA, three WWS residents (Trish Lambert, Bill Hiers, and Frank Caramanica) formed the Whitewater Springs Water Supply Corporation (WSWSC), a non-profit corporation that operates according to state law and will manage the water system after acquiring it. UDC and WSWSC were now in direct competition for the WWS water system.
Those founding WSWSC members solicited more members from the current water tap holders, who paid a membership fee in order to hire a lawyer to manage the negotiations with LCRA. The final negotiation price was $380,000 and the attorney advised the WSWSC to take the deal.
We secured a loan for $425,000 through a commercial bank, Extraco in Georgetown with a USDA guarantee. The $45,000 addition to the purchase price was to cover the future operating expenses. The deal was consummated in July 2012 and we were in the water business!