Bloomberg News

Texas Water Authority Votes to End $1.2 Billion San Antonio Suit

October 19, 2011

Oct. 19 (Bloomberg) -- Texas’s Lower Colorado River Authority, which supplies water to 1.1 million residents, agreed to settle a $1.2 billion lawsuit brought against it by the San Antonio Water System, serving the nation’s seventh-largest city.

The authority’s directors voted today to pay $30 million to the San Antonio system, which provides for 1.3 million people. Meeting in Austin, the board agreed to end the suit by paying $18.8 million and then $1.4 million annually for eight years.

The San Antonio system sued the authority in April 2009 after its board voted to halt a $2 billion program to expand supplies in the region, including new reservoirs. The directors had concluded the plan wasn’t feasible. The state has weathered the driest 12 months on record, a drought forecast to continue.

San Antonio paid the authority more than $40 million during seven years of development, according to a statement issued today. Managers of the system will recommend the settlement to its board at a Nov. 1 meeting, according to the statement.

“Through this settlement, San Antonians will recover a significant portion of their investment in the LCRA water-supply project, and avoid ongoing legal fees,” Robert R. Puente, the system’s president and chief executive officer, said in the statement. Both agencies will still examine ways to develop additional resources for the San Antonio system, the Lower Colorado Authority said.

“It’s never a good thing for two big public entities to be in litigation,” said Tim Timmerman, the authority’s chairman.

--Editors: Ted Bunker, Charles Carter.

To contact the reporter on this story: David Mildenberg in Austin at dmildenberg@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.


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