An Open Letter to Lost Pines Board of Directors

An Open Letter to the
Lost Pines GCD Board of Directors from its Constituents

RE:  Forestar (USA) Real Estate Group, Inc. Motion for Rehearing


Dear Board of Directors, 


Forestar’s request for a rehearing on the permits LPGCD granted earlier this year was on the agenda for the Board’s September 18, 2013, meeting, but was postponed until the October 16, 2013,Board meeting. Several events pertinent to this permit have occurred since that postponement, but the message from the coalition of landowners and citizens who want to protect the future of Lee and Bastrop Counties remains the same:  Stand strong in your duty to protect and conserve the aquifers under our two counties.


When the Forestar rehearing request was posted on the September 18 agenda, we had no reason to believe the Board would waver in its commitment to that duty. 


Forestar and Hays County have taken hostile actions toward Lost Pines recently, with the intent of harming Bastrop and Lee Counties by forcefully obtaining permits for far more water than Hays County needs, and for far more water than is available in Bastrop and Lee Counties without depleting our local aquifers. We understand that there has been a meeting or meetings this past week between Lost Pines and Forestar, and their lawyers, and now see that a special called board meeting is scheduled for October 15.


Despite Forestar’s and Hays County’s recent hostile action toward our two counties, we continue to believe the Board will see through the posturing and power plays. Nevertheless, we have encouraged our coalition to attend the October meeting and speak to you about their confidence in the course of action you are following. We appreciate learning of Mr. Totten’s efforts to change the meeting to a larger venue.


Specifically, we remain confident the purpose of the Forestar agenda item is to review Forestar’s request for a rehearing at an open public meeting in order to take action to formally deny the request, or, in the alternative, to refrain from acting at all so that the motion may be deemed rejected at the end of 90 days from the date of its filing. The critical question seems to be: has Forestar raised any new evidence in its August 6 motion to support its original 45,000 AFY permit application? The answer is no.


When the Forestar application was originally considered by the Board, you were aware, from your General Manager’s recommendations on the application that:


1.  Forestar had a Letter of Intent with the Hays County Commissioners Court for a minimum of 25,000 AFY up to 45,000 AFY (which letter would expire on September 30, 2013) and a Letter of Intent with the Dripping Springs WSC for 1,000-5,000 AFY.


2.  The 2011 Region K and Region L plans indicate that Hays County will need approximately 35,600 acre-feet per year of additional municipal water supply by 2060.


3. Forestar alleged potential use of water under the proposed permit for several other counties in central Texas; however, no counties other than Hays were identified as having had any negotiations with Forestar (described by the General Manager as “non-binding letters of intent”).


During the Board’s deliberations on the permit application, you may have been aware that Hays County promulgated a Request for Proposals in April, 2013, for a “supplemental groundwater supply” of 25,000 AFY to 50,000 AFY, which by its terms targeted the Simsboro portion of the Carrizo-Wilcox Aquifer under Lee and Bastrop counties as the preferred source of the supply.  The responses to the RFP were due on May 17, 2013.


While the due date of the RFP was two days after the Board acted on Forestar’s application, it was certainly clear to anyone who read the RFP and was aware of the 2011 Forestar Letter of Intent that, the Hays County RFP appeared tailor-made for Forestar and would most certainly be answered by Forestar. Of course, we know now that because of the RFP’s narrow scope and preference for Bastrop and Lee County water, Forestar was the only respondent to the RFP, despite the existence of at least one other water provider in Hays County whose project is much farther along than Forestar’s in satisfying Hays County’s need for 35,600 AFY by 2060. 


We also know now, that on September 24, Hays County Commissioners Court voted to execute a contract with Forestar to “reserve” the full 45,000 AFY, contingent upon receipt of a favorable opinion on the legality of this contract from the Attorney General’s office. We further know the contract obligates Hays County to pay at least $5 million over five years to Forestar to reserve 45,000 AFY. In fact, Forestar currently has a legal right to produce or deliver only 12,000 AFY.  The contract appears to contemplate the use of reservation fees, as well as any other amounts paid to Forestar by Hays  County, to satisfy Hays County’s contractual obligation to assist Forestar in suing LPGCD to get the additional 33,000 AFY.


Leaving aside Hays County’s blatant hostile action against our two counties, and the apparent uncertainty about the legality of the contract and/or the County’s authority to sign it absent an AG’s opinion, we note that there is no reference to the RFP, Forestar’s response to it, or to the proposed contract in Forestar’s motion for rehearing presently before the District. Thus, there is no reason for the District to take notice of the contract itself, since it is not mentioned in Forestar’s motion, and in fact arose post-filing of the motion for rehearing. Therefore, Forestar has raised no changed circumstances in its motion, and a rejection of the motion is in order.


We note that nothing the Board did on May 15 in granting a reduced permit precludes Forestar from submitting applications for additional water in the future.  If one were to read the Hays County contract (which presently is not a contract at all pending an AG opinion) it is notable for one thing: it does nothing to address any emergent need of Hays County for water — water which it has no way to accept at the wellhead — to pipe to Hays County, or to convey under its non-existent CNN to its non-existent customers. It was instead cobbled together to satisfy Forestar’s attempts to pry loose from the District the additional 33,000 AFY it was denied in its original application.  Your constituents do not think you will allow Lost Pines GCD to be bullied. We will support the District in every way possible.


The Board obviously has the benefit of its legal counsel’s advice. We had hoped the District would follow its Rule 14.6(5) and simply let the motion for rehearing be deemed rejected by passage of 90 days after it was submitted.  However, even if the motion is considered at the October 16 Board meeting, there is no compelling reason for the District to take any action, much less to give Forestar a rehearing on its permit application. The District should either act to deny Forestar’s motion, or simply allow the motion to expire with the passage of time by taking no action on it.


Environmental Stewardship, Neighbors for Neighbors, The Lost Pines Water Defense Fund, Lost Pines Sierra Club, and Independent Texans respectfully request that the Lost Pines Board of Directors reject Forestar’s Motion for Rehearing in accordance with its Rules.


Respectfully submitted,


Steve Box, Executive Director                                Environmental Stewardship

Michele G. Gangnes, Vice President                   Neighbors For Neighbors

Ernest F. Bogart, President                                   Lost Pines Water Defense Fund

Phil Cook, President                                               Lost Pines Sierra Club

Linda Curtis, Director                                             Independent Texans