Peñitas City Council may purchase land for water treatment plant

The Peñitas City Council may buy land to build a water treatment plant.

Peñitas already provides residents with sewer service. Water, however, is handled by the Agua Special Utility District.

To attract new businesses, Peñitas wants to simplify the development process, said Mayor Rodrigo “Rigo” Lopez. Requiring businesses to request sewer service from Peñitas and water service from the utility district hinders development.

“When you control a lot of your services, you’re able to facilitate for the developer,” Lopez said.

The City Council planned to discuss buying land for a water treatment plant on Monday. Members, though, adjourned the meeting without taking any action.

Acquiring the water infrastructure and what Texas calls the “Certificate of Convenience and Necessity” — which would allow Peñitas to provide water service to a specified area — will require approval from state regulators.

To acquire the certificate, build the treatment plant and provide water to Peñitas residents, the city would need permission from the Texas Public Utility Commission, the Texas Water Development Board and the Texas Commission on Environmental Quality.

Perhaps most importantly, the City Council needs to strike a deal with the utility board.

Members of the utility board and City Council discussed the matter numerous times during the past five years without reaching an agreement.

In 2014, then-utility board President Ricardo Ochoa wrote a letter to then-Peñitas Mayor Antonio “Tony” Flores Jr. about the issue.

Ochoa said the utility board had agreed to negotiate with Peñitas. Whether or not any substantive negotiations occurred as a result of the letter remains unclear.

In 2017, then-utility board President Roger Hernandez apparently signed an agreement with Peñitas by mistake.

“The primary purpose of this agreement between both parties is to decertification of CCN (sic) and transfer from Agua SUD to the City of Peñitas in good faith, efficiently and in a timely manner,” according to the five-page agreement, which is dated October 2017.

Along with creating a transition committee, the agreement referenced a five-year plan to build a water treatment plant in Peñitas.

When the water development board asked about the agreement in May 2018, an attorney for the utility district said that “no agreement has been approved or finalized,” according to emails released under the Texas Public Information Act.

The utility board formally approved an agreement with Peñitas in September, creating a committee to discuss the transition.

“In the short term, we’re still looking to start negotiations with Agua SUD in reference to purchasing our CCN,” said City Manager Omar Romero. “Obviously, at some point, the city will look at getting a water plant.”

Peñitas wants to reduce water rates, which may spur development, and provide better service by installing higher-quality pipes that would support fire hydrants.

The utility district charges Peñitas a per-customer fee to handle sewer bills. Peñitas may be able to save money by creating an in-house billing department that would handle both water and sewer bills for residents. Peñitas could pass the lower costs along to customers.

“We don’t know how much we’ll lower rates, but we do know that we’ll be able to lower them,” Romero said.

The city also wants to replace old water pipes, which the utility district installed when Peñitas remained a rural area, with new pipes capable of supporting fire hydrants.

Along with providing better fire protection, the new pipes would eventually reduce insurance bills for Peñitas residents.

“Not only is water essential for growth,” Lopez said, “but it also produces revenue for our city.”