Seguin approves deal with Springs Hill for customers

Dalondo Moultrie The Seguin Gazette

In a deal about a year in the making, the city of Seguin is poised to take over part of a local water provider’s territory and deliver utility service to more customers in Guadalupe County.

City of Seguin Utilities is taking over water service to a nearly 9,000-acre area previously operated by Springs Hill Water Supply Corporation, Seguin City Manager Steve Parker said.

“The agreement has been signed,” he said. “The next step is to file it with the Public Utility Commission letting them know we’ve approved a deal. Then there’s notification that has to go to all the customers.”

The affected area includes properties north of Interstate 10 between State Highway 46 and State Highway 123, and up Link Road just north of Cordova Road, Parker said. Link Road serves as the northern boundary, he said.

In the nearly 9,000 acres, there is about 1,823 existing customers, Parker said. Those include commercial and residential properties.

City staff members have negotiated for nearly a year to make the deal with Springs Hill, Parker said. Continued growth in the area led to the transfer of coverage area, said Dennis Lozano of Malone/Wheeler Inc., Springs Hill’s general engineering consultant.

“So, the agreement puts Springs Hill in the position of balancing supplies and demands and allows the region to continue to grow by using Seguin’s water supplies while Springs Hill focuses on the balance of its service area,” he said. “Massive, unprecedented, exponential growth that hit Seguin has strained water utilities. It’s not just Seguin. It’s across the region.”

The plan frees up water for the private utility to meet its demands for other customers, Parker said. Plus, Seguin picks up additional customers, he said.

“Those 9,000 acres, the way this is looking, this will double our service territory in terms of number of customers, which will be a great economic benefit to citizens because it’ll be the value or that cost per gallon of water will go down because you’re having more people share in the overall cost of it,” Parker said. “I think it’s a great win for both entities.”

Seguin will pay about $3 million, he said. Infrastructure installation will occur as part of the process but after all is said and done, Seguin Utilities could see revenue from about an additional 8,500 customers, Parker said.

More hookups could mean better rates for current and future customers, he said.

“You’re able to share in the overall administration of that department,” he said. “The water director, the water engineer, billing people, that gets spread out over another 8,500 people. That makes the economy of scale more advantageous for those users.”

The deal could help minimize future rate increases, though likely won’t eliminate future price adjustments, Parker said.

Overall, he said, everyone wins.

“I think this is a great win for Springs Hill and I think this is a really good win for the city of Seguin,” Parker said. “I’m glad we were able to come to a great compromise.”

View article on SeguinGazette.com