Timeline of LMUD Land Sale of 81 Acres

Summary

Of the approximate 82.503 acres tract of vacant land with a street address of 1931 Lohmans Crossing Road, Lakeway, Travis County, Texas that was appraised on behalf of owners Lakeway MUD (LMUD):

• Approximately 3 acres have been retained by LMUD for a Waterline Relocation Area
• Approximately 81 acres was offered up for bid and currently under contract with HSD – Lakeway Holdings, LLC (Legend Communities) :
  • Approximately 15 acres of that contract has closed
  • Approximately 63 acres remain under contract

Background

The land was originally purchased by Lakeway MUD (LMUD) in 1991 to be in compliance with Texas Commission on Environmental Quality’s (TCEQ) “Highland Lakes Discharge Ban” which prevents the treated effluent water from our wastewater treatment plant from entering the Highland lakes, requiring a specified allotment of land (based on the capacity of the water treatment plant) be accessible to hold or discharge the water. By 1995, 45 acres of this 81 acre area, designated as Cedar Track 1 (CT1), was being used to allow for the expulsion of this treated effluent water, in addition to our three holding ponds already in existence. A second Cedar Track (CT2) was added in 2001, which is located off Stewart Road and RR 620. Under TCEQ’s Chapter 210 Reclaim Water Authorization, which allows for Type 1 effluent water to be used for beneficial reuse purposes, namely irrigation, LMUD has also been using this treated effluent water to irrigate Lakeway’s golf courses and the medians along Lakeway Boulevard since LMUD was formed in 1972. As such, we were one of the first water providers in Texas to implement water conservation efforts by saving potable water from use on heavily irrigated areas. With the continued expansion of what we now call our “reuse water program” – by establishing more contracts to use our reuse water on more commercial properties throughout Lakeway – CT1 became unnecessary since the water was being used elsewhere. However, we were not yet receiving credit for this beneficial reuse from TCEQ. In 2014 we submitted plans to TCEQ in an effort to change our permit requirements that would allow us to sell CT1 and the surrounding acreage since it had become an expense we no longer needed. These expenses included maintaining the infrastructure for CT1 as well as fire mitigation efforts. In 2011, one of the hottest years on record – leading to fires breaking out in nearby Steiner Ranch, Spicewood, and Bastrop – we voluntarily complied with the National Fire Protection Association’s (NFPA) Firewise USA program to minimize fire hazard on the outer edges of the acreage that were closet to residential properties.

TCEQ approved our change in permit in May 2015, deeming our unused 81 acres unnecessary for us to retain, so we contracted with an appraisal firm to assess its value. Throughout this whole process internal discussions took place about what we would do with the proceeds from this sale. It was ultimately decided that it would be in our best interest to use it for paying down on our current bonds where possible. Our debt at the time was $21.5M so by early payment, we were able to save approximately $40K in interest. Having cash on hand would also minimize the need for future bonds. Secondly, we were already in the planning process for the expansion of our S5 wastewater treatment plant to accommodate the additional need for processing the wastewater for Rough Hollow, an area managed by Crossroads Utility Services (MUD #11, 12, and 13), but through an agreement, treated by us. Thirdly, this additional income would also allow for us to provide seed money for the now termed “Out of District Wastewater (ODWW) Project” – a project to bring the option of a public sewer system to the first 17 sections of Lakeway, an area currently serviced by personal septic systems – which had been in the works, but was not approved by the Board until May 2018 after a public survey confirmed nearly 80% of the residents in the affected area would be interested in having the option to connect. This allowed us to offer the service with no upfront money to those who choose to hook up as we move through Phases I and II of the project which is currently underway.

Timeline

Please click links for supporting documents and documentation of meetings.

The Board of Directors meets the second Wednesday of every month at 9:30 a.m. Every Regular meeting has time reserved for public comment, and everyone is welcome.