Tribune/Debra Reid - TMWA "assets" like water treatment plants and employees could be leased to private investors.
The proposed project, brought forward to the city of Reno by investment banking and securities firm Goldman Sachs, was presented by Reno’s financial planner, Andy Green, who explained the study would just be “an exploration of a concept.”
“This would be taking advantage of a natural asset growth,” Green said, explaining that there has been an influx of pension funds wanting to invest in essential assets, such as water. “It needs to be at least explored.”
If enacted, the proposed plan would not be a sale of assets but a lease at a maximum of 50 years, Green said, and TMWA would mandate operation requirements set by the three owning entities of the cities of Reno, Sparks and Washoe County.
Leased assets would possibly include water treatment facilities and employees but cannot be determined until the study concludes what is realistically possible for TMWA.
“It’s like leasing out your house,” Williams said, before publicly announcing her inability to run TMWA with the new direction it has taken.
The study itself will be conducted by Goldman Sachs consultants, Nevada State Bank consultants and additional legal consultants that the TMWA board hires. If the study findings are turned down by the board at it Aug. 20 meeting, Goldman Sachs and Nevada State Bank would not seek payment.
TMWA, however, would pay for the additional consultants.
General concerns were expressed by TMWA Board chairman Mike Carrigan saying that the costs of the study itself may come as a loss if the plan is later turned down.
In response, Dave Aiazzi, vice-chairman of the TMWA Board, suggested enacting a monetary cap on the study costs, peaking at $100,000.
If approved, the plan would be on a bid basis and with an up-front cash payment from a private investor, which Green expects at first blush to be between $160 and $165 million, a significant amount to pay off TMWA’s debt and fund future water maintenance projects.
Contracts would be between TMWA, the three owning entities and the private investor. Buyer rates would be returned to a Public Utilities Commission rate as it was originally when Sierra Pacific Power Company owned TMWA.
Public comment was largely opposed with several TMWA employees angered by the possible transition from a local organization into the hands of a private investor and possibly raising water prices. As one commenter said, “Do we want water to become a commodity like oil?”
Similarly, Williams expressed that caution was needed if the study was approved.
“When you’re talking about leasing out your most precious asset, you need to think long and hard,” she said.
TMWA employees present at the meeting expressed Williams' same sentiment.
“I guess I agree that everything should be looked at,” said Travis Bunkowski, a TMWA employee for five years. “But it needs to be looked at with caution.”
Similar leasing projects have been proposed in Chicago and Memphis.
The motion to pass the study was approved by all TMWA board members, with Chairman Carrigan as the lone dissenter.
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