Frequently Asked Questions
Q: What are we voting on?
A: Members are voting whether to approve the sale of WOWSC’s water and wastewater systems to Central States Water Resources (CSWR) for $1.08 million.
Q: What happens if members approve the sale?
A: The sale will move to the Public Utility Commission of Texas (PUC) for review and approval. Once approved and closed, CSWR will take ownership and begin operating the systems.
Q: What happens to my refund?
A: Every member will receive their refund once the sale closes and WOWSC receives the funds from CSWR.
Q: How much will the refund be?
A: Refunds are based on the Equity Buy-In Fee you originally paid — most will range between $3,000 and $4,600 per property.
Q: When will refunds be paid?
A: Refunds will be distributed at closing, after PUC approval and the transfer of funds. The PUC process usually takes 12–18 months.
Q: How about the membership fees I paid?
A: All membership fees are being held in a separate reserve account that cannot be used for anything else. Unlike prior boards, this board has kept those funds untouched and dedicated solely for member refunds once the sale closes.What improvements does the system need?
Q: What is the Equity Buy-In Fee (EBIF)?
A: The EBIF is the capital contribution each member paid to build and maintain the utility’s infrastructure — the wells, tanks, lines, and treatment systems. When the sale closes, members will be paid out their Equity Buy-In Fee from the sale proceeds. This is your return of capital investment in the system.
Q: I didn’t pay the Equity Buy-In Fee — the previous owner or developer did. Do I still get the refund?
A: The refund goes to whoever is the current member at the time of the sale closing, since that person holds the membership in the corporation. If the property changed hands, the refund does not follow the prior owner — it stays with the current member listed on WOWSC’s records when the sale closed.
Q: What happens if members don’t approve the sale?
A: WOWSC will remain member-owned and will continue operating the systems. All costs for repairs, upgrades, and compliance will stay the responsibility of the members.
Q: When will payments be made?
A: After the PUC approves the sale and it closes. The PUC review process typically takes 12–18 months.
Q: Am I going to get my rate refunds back?
A: Yes. The rate refunds are being processed and paid out now. Because the PUC process will take roughly a year and a half, all rate refunds will be completed well before the sale closes.
Q: What if we don’t sell? How will we pay for everything?
A: Then members will have to fund it. The clarifier alone could cost about $500,000, and other required improvements could trigger a special assessment of $2,500–$3,000 per property plus higher monthly rates.
Q: I heard TCEQ required a fence around the effluent field — is that true?
A: Yes. TCEQ issued a violation because the effluent field was never fenced when it was first built, even though that’s required by law. Because of the water quality type, the entire 24-acre field must be fenced. CSWR will handle this once the sale is complete. If the sale is not approved WOWSC will need to erect a 6 foot fence requiring barb wire or an 8 foot fence
Q: What happens to all our PUC obligations after the sale?
A: Once CSWR takes over, the current PUC obligations duties will end.
Q: What happens if we don’t sell — what are those PUC obligations?
A: WOWSC stays under PUC oversight for the next 4 years, which includes:
- Multiple annual filings (financial audits, reports, and compliance documents).
- PUC approval required for any rate or tariff changes.
- Filing bylaws, elections, and board updates every year.
- Maintaining a document-management system and dedicated board email accounts.
- Hiring auditors, attorneys, and administrative help to manage it all.
All of that adds cost to the corporation and the members.
Q: Will CSWR charge us assessments to fix everything?
A: No. CSWR is a large, professional utility that operates hundreds of systems. They have experienced engineers and access to infrastructure materials and contractors at discounted bulk rates.
All upgrades are recovered through rates spread across all their customers, not one community. They typically do not recoup any of their investment for the first three years, and you will not see one-time assessments like those WOWSC members have faced in the past.
Q: What happens for developers or anyone wanting new service after the sale?
A: Developers will have to go through CSWR to request new service or connections.
As CSWR explained at the Town Hall, not a single penny for new development or expansion will come from existing customers.
By law, anyone requesting new service or additional capacity must pay for the required system upgrades, extensions, or improvements needed to serve that project.
That’s the correct process — unlike what’s been done in the past, when prior boards allowed costs for new construction or development to be passed along to existing ratepayers.
Q: How will I pay CSWR for my monthly bill?
A: CSWR offers many convenient payment options. You can pay:
- In person at HEB, Dollar General, and other participating payment centers in Marble Falls, Austin, and throughout Texas.
- Online through CSWR’s secure website.
- Over the phone using their automated system.
- By mail or automatic bank draft if you prefer.
Q: Does CSWR offer any programs for customers who are struggling financially?
A: Yes. As an Investor-Owned Utility (IOU) regulated by the Public Utility Commission of Texas (PUC), CSWR is required to offer programs that assist customers facing financial hardship.
These include options for elderly customers and low-income families who may qualify for discounted rates or payment assistance programs.
Q: Will CSWR install smart meters?
A: Yes. CSWR discussed this at the Town Hall — their plan is to upgrade to smart meters over time. These meters allow readings to be done remotely, similar to PEC’s system, so there’s no need for anyone to walk on your property to read your meter. Smart meters also provide more accurate readings and faster detection of leaks or usage issues.
Q: What was the CoBank loan originally for?
A: The CoBank loan was supposed to be used for the new clarifier project and related system improvements. However, no clarifier was ever built. The current board is still investigating how those funds were spent. From available records, it appears some of the money may have been used for legal fees and other expenses rather than the intended project.
Q: Will WOWSC owe taxes on the sale of the airport property?
A: Possibly. The IRS taxes a nonprofit water supply corporation (501(c)(12)) on income received from non-members that exceeds a certain percentage of total annual income.
Because the airport buyer was not a WOWSC member, that income may be considered taxable.
Q: So could WOWSC have to pay taxes on the airport sale?
A: It’s possible. The current board is reviewing this with tax and accounting professionals to determine if a portion of the airport sale proceeds will be subject to federal income tax.
If so, the tax would be paid from the corporation’s general funds before any dissolution or member payouts.
Q: What happened to the sale proceeds from the airport property sale?
A: The airport property was sold for about $1.2 million.
Because there was an existing loan with CoBank, any proceeds from the sale automatically went to them. When CoBank learned the property was being sold and that loan payments hadn’t been made for some time, they stepped in and claimed their portion of the sale proceeds. As a result, over half of the sale money went to CoBank.
Q: Why did the CoBank loan default?
A: The loan defaulted because loan payments weren’t being made by prior boards.
When CoBank found out the airport property was being sold, they exercised their right to collect what was owed from the sale proceeds.
Q: What was the CoBank loan originally for?
A: The loan was intended to fund the clarifier project and other wastewater improvements.
However, no clarifier was ever built, and the current board is still reviewing where that
Q: What was the rest of the money used for?
A: The remaining funds were used responsibly to bring WOWSC current and clean up long-standing debts left by previous boards:
- Unpaid bills were caught up.
- A state-mandated PUC financial audit was paid for.
- A large outstanding attorney bill to Lloyd Gosselink, the former law firm, was resolved.
That bill was originally around $650,000. The current board successfully negotiated it down to $275,000, saving the corporation roughly $375,000. WOWSC is now making monthly payments toward that settlement — a major step in restoring financial stability and accountability.
Q: Why did the CoBank loan default?
A: The loan defaulted because required payments were not made by prior boards.
When CoBank learned that the airport property was being sold, they exercised their right to collect what was owed from the sale proceeds.
Q: What are Central States Water Resources (CSWR) current water rates?
A: According to the latest rate schedule, for systems like theirs the minimum monthly charge for a 5/8″ or 3/4″ meter is $49.89, with an additional volumetric charge of $6.30 per 1,000 gallons in certain systems. CSWR+1
(Note: Rates vary by location and system, so you’ll want to check the specific tariff applicable to our area.)
Q: I see on their rate sheet “pass-through charges.” Does that apply to us?
A: No — the “pass-through charges” refer to additional wholesale or purchased water/district fee costs that CSWR pays when it buys water or wastewater services from another provider. Because our system draws directly from the lake and we don’t purchase water through another utility, the pass-through charge doesn’t apply to us. CSWR+1
Q: Can CSWR just charge whatever rates they want to?
A: No. CSWR is a state-regulated utility under the Public Utility Commission of Texas (PUC).
That means they cannot raise or change rates without first filing a rate case and getting approval from the PUC. Any rate adjustments have to be justified with financial data, reviewed by regulators, and made available for public comment before approval.
In short — CSWR’s rates are fully regulated, and they can’t just decide to increase them on their own.
Q: What’s all this talk about the clarifier everyone’s been hearing about?
A: The clarifier is one of the most important parts of our water treatment system. It’s a large tank where raw lake water first goes so that dirt, iron, and other solids can settle out before the water moves on for filtration and disinfection. It’s what ensures the water coming from the lake is clean and safe to drink.
Q: Why does the clarifier need to be replaced?
A: The clarifier is over 30 years old, rusted, and structurally deteriorating, as documented in the TCEQ inspection report. It no longer operates to required standards and must be fully replaced to remain compliant and safe.
Q: Didn’t previous boards already take out a loan to build this? Where did that money go?
A: Yes. Previous boards took out a loan from CoBank that was supposed to fund a new clarifier. However, no clarifier was ever built. Much of the money was used for other expenses, including legal fees. When the airport property was sold for $1.2 million, CoBank collected over half of the proceeds to pay off the defaulted loan. The current board has since cleaned up those debts and resolved old financial obligations.
Q: Where are we now with the clarifier project?
A: The current board is conferring with professional engineering consultants to plan the project properly. Their rough estimates start around $500,000, not including the cost to install required fencing around the 24-acre effluent field. These steps ensure all work meets TCEQ standards and prepares the system for long-term stability.
Q: I’ve heard misinformation that we don’t need a fence around the effluent field — is that true?
A: No. When the system was originally built, the proper TCEQ notifications were not completed, as cited in the TCEQ violation notice. After direct conversations with TCEQ, the agency confirmed a fence is mandatory because the treated effluent contains the highest concentration of bacteria and must be secured under state law. There is no exception.
Q: I’ve heard we could just retrofit or sandblast the old clarifier to save money — is that true?
A: No. Some former board members suggested that, but engineers have advised against it. The clarifier is severely rusted, corroded, and structurally unsound, as confirmed by TCEQ. Retrofitting would not meet state standards and would risk future failure. Professional engineers have been clear: a new clarifier must be built.
Q: What happens if WOWSC sells the system to CSWR — will they build the new clarifier?
A: Yes. If the sale is approved, CSWR will take full responsibility for constructing a new clarifier and completing all TCEQ-required upgrades, including fencing. CSWR operates hundreds of utilities and has the engineering and construction resources to complete large-scale projects efficiently.
Q: If CSWR builds the clarifier, will we have to pay for it out of pocket?
A: No. CSWR’s costs are recovered through PUC-regulated rates that are spread across all their customers statewide. They cannot impose one-time assessments or surcharges without formal PUC approval.
Q: I’ve heard they might hit us with surcharges or assessments later — is that true?
A: No. CSWR is a state-regulated utility and cannot charge new surcharges or assessments without filing a rate case and obtaining PUC approval. All rates must be reviewed and justified.
Q: What if we don’t sell — how would we pay for the clarifier and upgrades ourselves?
A: Then the cost would fall entirely on WOWSC and its members. The clarifier alone is estimated at $500,000 plus, and with fencing, engineering, and compliance work the total would likely exceed that.
Members would face assessments of $2,500–$3,000 per property and higher monthly rates to fund ongoing maintenance and required filings.
Q: What happens to WOWSC after the sale?
A: Once all payments and obligations are complete, WOWSC will wind down and dissolve. CSWR will become the regulated utility under PUC and TCEQ oversight.
Q: I’ve heard you can retrofit or sandblast the old clarifier to save money — is that true?
A: No. Some former board members suggested sandblasting or retrofitting the old tank, but engineers have advised against that approach.The clarifier is rusted, corroded, and structurally unsound, as confirmed in the TCEQ inspection report.
Engineering consultants determined that retrofitting would not meet state standards and would be unreliable long-term. A new clarifier must be constructed to ensure safe and compliant operation
Q. What does it mean if members vote “YES”?
A “ YES” vote authorizes WOWSC to move forward with:
- Completing a formal sale agreement with CSWR.
- Submitting the sale for approval by the PUC, which can take 12–18 months.
- Distributing refund checks to members once the sale closes and WOWSC receives the purchase funds.
- Starting the legal winding-down (dissolution) of WOWSC after the sale is complete.
CSWR would then own and operate the systems, handle upgrades, and assume all regulatory responsibility.
Q. What does it mean if members vote “NO”?
A “NO” vote means WOWSC will remain member-owned and operated, and the corporation will need to find other ways to fund costly system upgrades, regulatory compliance, and ongoing operations. The burden of financing and managing future capital projects — such as the clarifier replacement — would remain with the members.
MISINFORMATION ABOUT “HOLDING OUT FOR MORE MONEY”
Q: A former director of WOWSC is saying we should hold out for more money. Is that true?
A: No. WOWSC is a 501(c)(12) nonprofit, which means members cannot receive profits or dividends from any sale. Only documented capital contributions—your Equity Buy-In Fee, your membership fee, and required rate refunds—can legally be returned. CSWR’s offer reflects the actual condition of our aging system, and they take on all future TCEQ requirements and infrastructure costs. Claims that “we can get more” have no basis in law or fact.
Q: Were WOWSC’s financial books in good condition when the new board took over?
A: No. The books had been poorly maintained for years, with reused account numbers, missing documents, and overwritten payment histories. A professional audit is underway and is confirming these gaps.Because past records were inconsistent, returning each member’s documented Equity Buy-In Fee is the fairest and most legally appropriate way to distribute sale proceeds.
Q: Have customers in the past paid their fair share for system upgrades?
A: Not fully. In proper utility accounting, major infrastructure projects should be financed with long-term utility loans (20–30 years) that match the useful life of the facilities. This spreads the cost fairly across all customers who benefit from the system over time.
Past boards did not do this. They used short-term local loans, some with higher interest rates, 10-year terms, balloon payments, or lines of credit that were not designed for infrastructure financing.
This front-loaded the burden onto current customers rather than distributing it across future users — another reason why refunding each member’s documented Equity Buy-In Fee is the most fair and accurate approach.
