Missouri-based Garney Construction is now the owner of the Vista Ridge water pipeline project after attorneys representing the construction firm, former owner Abengoa Vista Ridge, and other partners came to an agreement on Tuesday afternoon.
Garney was already a construction partner but will now be in charge of operations, maintenance, and financing of the project.
The announcement comes just days before the March 28 deadline for the subsidiary of Abengoa Sociedad Anónima, the Spanish renewable energy and engineering conglomerate that filed for protection from its creditors in November 2015. Abengoa had been searching for months for another firm or corporation to take over 80% of the 142-mile water pipeline project that would bring 16 billion gallons of water from Burleson County’s Carrizo Aquifer to San Antonio every year for 30-60 years.
“Garney at this point is going to own 80% of the equity stake in the project,” said San Antonio Water System President and CEO Robert Puente. “They will have 100% authority … and all of the risk.”
The construction company will assume past due bills and continue to fund the project through a contract that maintains the same levels of responsibilities as those outlined in the previous contract with Abengoa, Puente said.
“We’re still only buying water if it makes it to San Antonio.”
That is, pending the new contract’s review by the SAWS board.
SAWS was not directly involved in negotiations, he said, but the board has the right to approve or deny any agreement made that involves the sale of more than 50% of the project. “We have been giving them messages … about what kind of agreement (SAWS wants).”
Mayor Ivy Taylor announced the then-pending deal as she delivered her 2016 United State of the City Address to an estimated 1,300 business, community, and City leaders earlier in the day at the Henry B. Gonzales Convention Center.
“This is not a material change – but we will proceed as we did during contract negotiations by publicly reviewing this proposal to ensure that it continues to protect customers, City of San Antonio taxpayers and SAWS’ rights under the project contract – which was unanimously approved by City Council in 2014,” Taylor said.
SAWS will conduct a full review of the contract in the weeks ahead as “it’s not physically in our hands yet,” Puente said. “We will be notifying our board and notifying City Council and holding a public meeting” before the SAWS board votes on the new contract in late April or early May.
Puente said he would brief the full City Council on the matter if a request was made.
Councilman Ron Nirenberg (D8) requested just that during a phone interview with the Rivard Report Tuesday evening.
“I’m pleased that Abengoa, which has long caused me some concern, seems to be less a part of the future of this project,” Nirenberg said. “I urge SAWS to come to council to present the details of the agreement to the public … to continue to maintain the transparency that we’ve works so hard to achieve.”
Nirenberg has requested such briefings before. He filled a formal council consideration request (CCR) that would increase the amount of oversight Council has over the Vista Ridge contract.
“As long as the ratepayer is protected and as long as the parameters stay within the previous contract, SAWS will have my cautious support,” Nirenberg said.
Garney, which specializes in water and waste water projects, has offices across the U.S. and is a contractor on previous and ongoing projects with SAWS, such as the Twin Oaks Aquifer Storage and Recovery (ASR) facility, water resource integration projects, and the Carrizo Aquifer pipeline.
“The employee-owners of Garney Construction are excited to lend our water system expertise to this significant project for the city of San Antonio,” stated Mike Heitmann, president and CEO of Garney Construction, in an emailed statement.
Because SAWS has about 20 years of experience with Garney – and it’s already working on the Vista Ridge project – the transition will be a smooth one, Puente said.
“They’ll be able to wake up the next day and start working,” he said.
Puente speculates that since Garney is not a financial services company, it likely just wants to take Vista Ridge “past the goal line” and then sell to a financial firm once the project is built. “There’s profit to be made in building this pipeline and they don’t want to lose that opportunity.”
Work has continued on the project, but it hasn’t been as active since Abengoa filed for protection against its creditors last year. Large parts of the projects, like drilling wells, were “put on hold,” Puente said.
Top image: SAWS President and CEO Robert Puente is interviewed by reporters in October 2015. File photo by Scott Ball.