The project, which was put together by an investment banking and securities firm Goldman Sachs, would entail TMWA to lease an undetermined amount of water assets for 50-year periods, generating a significant upfront cast payment, according to a staff report.
The owning entities of Reno, Sparks and Washoe County would retain ownership of the assets after the 50-year period and are allowed to mandate that the properties be returned in equal or better conditions than before.
Before enacting such a plan, TMWA board members have agreed to meet and vote upon whether an extensive study should be conducted to determine the feasibility, benefits and consequences of this plan.
Lori Williams, general manager of TMWA, said that by approving the study, members can fully understand their options.
“I really need to have the details to determine whether this is a viable option,” Williams said, explaining that additional financial, engineering and legal consultants would be hired to analyze the study’s findings. “You want to understand all the ramifications of a project like this.”
Possible revenue would be divided among the three entities and be reinvested back into water facilities in the area, Williams said. Estimated payment amounts range between $100 to $160 million.
TMWA itself was purchased as an asset more than seven years ago by Reno, Sparks and Washoe County. If such a leasing project were to be pursued, staff reports conclude that the objectives would be the same as the original acquisition.
Mike Carrigan, TMWA board chairman and Sparks City Council member, said he feels strongly that the water assets should remain in the hands of the citizens.
“Seven years ago we got it back into the hands of the public,” Carrigan said. “It should stay that way.”
Another general concern, as Carrigan expressed, is whether the financial gains are valid.
“It seems it’s a way for someone (private investors) to make money,” Carrigan said. “I’m not a big fan of leasing out TMWA but we have some good, hard questions lined up for today’s meeting.”
Potential investors have not been identified, Williams said, but the types of investors will be considered at today’s meeting.
“I think as we are looking at this opportunity in this study, there will have to be decisions made to determine what type of investors,” Williams said. “Maybe it will give us some options.”
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