In 2018, Ronnie Urbanczyk signed a contract to purchase water from Texas Water Supply Co., a Boerne company with access to at least 40 water wells that tap into the drought-sensitive Trinity Aquifer just south of the Bexar County line.
Three years later, Urbanczyk doesn’t want the water anymore, but that won’t stop Texas Water Supply from holding him to the water contract. The impasse could put an end to plans to turn Urbanczyk’s land into a state park.
The conflict is just the latest for Texas Water Supply, whose business tactics have led to complaints from its biggest customer, the San Antonio Water System, over how the company operates its wells. Groundwater experts have also expressed concern about how the company’s planned pumping will affect people who depend on the Trinity Aquifer for home use. Landowners along the company’s planned pipeline route have also faced threats of eminent domain from the company.
Unlike newer wells that supply water to small-lot landowners and housing developments north of San Antonio, Texas Water Supply’s wells come with no limits on how much water the company can pump. That’s because the unregulated wells were drilled before the local groundwater district was established in 2001.
Local water supplies have been under pressure for decades as part of the explosive growth that has put Comal County at the top of lists of fastest-growing regions in the U.S. The boom in development has also led to investors buying up water rights and marketing them to developers in water deals that echo the oil and gas deals that have made many a Texas landowner rich.
Urbanczyk thought the Texas Water Supply wells would be a good bet to supply a 1,640-home subdivision he was planning on roughly 560 acres of his property, Honey Creek Ranch, just outside Bulverde. He and his wife, Terry, have lived there with their children since the late 1990s.
After a battle with neighbors, environmentalists, and cavers intent on protecting Honey Creek Cave and the pristine stream that pours out of the cave, Urbanczyk entertained an offer from the Nature Conservancy and the Texas Parks and Wildlife Department to buy his land and make it a park. TPWD commissioners approved the funding last month.
But TPWD won’t take the land if it comes with a requirement to buy a whole subdivision’s worth of water, as the contract stipulates.
“Please spread the word that Honey Creek will not become a park unless the … contract can be stopped,” Terry Urbanczyk wrote in an email to potential supporters obtained by the San Antonio Report. “We have tried every way possible to get them to back down or change the contract but they will not.”
Ronnie Urbanczyk declined to be interviewed for this story.
Texas Water Supply President Kevin Meier declined to comment, but a legal filing in a court battle with the City of Bulverde over whether Texas Water Supply is adhering to Bulverde’s building ordinances might explain why the company has no interest in dropping the contract.
It has spent “thousands of hours of effort and tens of millions of private dollars” building a water pipeline from its Trinity Aquifer wells to Urbanczyk’s ranch along State Highway 46 in Comal County, the filing states.
Tapping Trinity Aquifer
Texas Water Supply’s business model is to profit off pumping the Trinity Aquifer, a water-bearing limestone rock layer that sweeps through northern Bexar and southern Comal counties. Texas Water Supply’s website says its wells give it access to enough water to supply 200,000 people.
The company has two fields of water wells, speckled across northern Bexar County next to tract housing, undeveloped lots of former ranchland, and alongside the Salado Creek trail. One set of wells lies south of the Army’s Camp Bullis, and another set is scattered on either side of U.S. Highway 281.
“The Texas Hill Country is one of the fastest-growing regions in the country, and we’re committed to sustainably supplying water for its population,” the company’s website states. “
Texas Water Supply’s largest customer is SAWS. The arrangement is a holdover from Bexar Met, a troubled water utility that SAWS absorbed nine years ago.
SAWS’ top officials often complain about Texas Water Supply’s unreliability, especially during droughts.
“It’s a very volatile supply that they produce,” said Donovan Burton, a SAWS vice president. “They produce a lot of times when it’s wet, but it’s not as productive in dry times.”
At full production, Texas Water Supply has said it can pump up to 32,000 acre-feet, or 10.4 billion gallons per year. Groundwater experts believe the Trinity Aquifer can’t sustain that amount of pumping.
It far exceeds the 24,856 acre-feet per year that the groundwater district, Trinity Glen Rose Groundwater Conservation District, has said can be pumped without causing unwanted drawdowns in neighboring wells. The district’s territory includes sections of the Trinity Aquifer in northern Bexar County and slivers of Comal and Kendall counties.
“The proposed additional withdrawal now makes it that much more difficult, if not almost impossible, to manage this resource effectively,” wrote George Wissmann, Trinity Glen Rose’s general manager, in a 2017 letter.
Company has ties to corrupt Bexar Met contract
Texas Water Supply is the latest incarnation of Water Exploration Co, a limited partnership formed in 1999 by Boerne water marketer and well driller Dean Davenport and unnamed investors. In the late 2000s, Davenport’s company often made the front page of the San Antonio Express-News because of a corruption scandal involving Bexar Metropolitan Water District.
The now-defunct utility that once covered swaths of Bexar County mostly outside Loop 410 awarded a $177 million contract to Water Exploration and waived its sovereign immunity, allowing the company to sue Bexar Met over disputes.
Days after the contract was awarded, Bexar Met’s former spokesman, T.J. Connolly, received $16,000 from Water Exploration. Connolly later pleaded guilty to misdemeanor charges after taking the money and using it to make campaign contributions to Bexar Met board members.
In 2012, when SAWS took over the struggling Bexar Met, it took over the Water Exploration contract, too. SAWS President and CEO Robert Puente said the utility had to take on all of Bexar Met’s assets and liabilities.
“There’s numerous, numerous contracts they had that we either had to just absorb, buy out, or renegotiate,” Puente said. “Some of them were good, but most of them were bad.”
In the case of Water Exploration Co., SAWS officials negotiated contract amendments that require the company to stop pumping when Trinity Aquifer levels drop to a certain threshold. That’s meant to protect nearby landowners and businesses, hundreds of whom rely on private Trinity Aquifer wells for drinking water.
Burton said SAWS negotiated a “floor” into the contract because “they have water quality issues below that level.”
“And then there’s impacts to all the regional neighbors,” Burton continued.
SAWS’ displeasure with Texas Water Supply also stems from the way the company operates its water wells.
“It could be a decent project if they would just run it in the right way and not try to do what they do, which is just trying to sell so much water and pump out so much water all at once,” Burton said.
The contract with SAWS ends in 2027; officials said they do not intend to extend it.
Texas Water Supply is born
The looming end of the SAWS contract could have spelled the end of profitable pumping from the Trinity wells for Water Exploration. Instead, in 2017, Brightstar Capital Partners announced it had chosen to partner with the newest incarnation of the company, Texas Water Supply, which included Davenport’s company and another controlled by Harold “Trip” duPerier III, a Boerne real estate agent who bills himself as “the Texas Landman.”
Brightstar founder and managing partner Andrew Weinberg praised Texas Water Supply in a statement at the time, calling it “an excellent fit with our strategy of investing in closely held businesses where we can apply our capital, technical knowledge, and operating experience to drive growth and value-creation.”
Meier, a Bandera real estate agent who worked with duPerier, replaced Bill Gehrmann as Texas Water Supply’s top official last July. The company now has multiple full-time employees and an office in Boerne.
DuPerier’s real estate website states, “We respect the land and the natural wonders of Texas” and that “the Texas Landman believes in long-term and sustainable services that produce enduring products.”
Ryan Bass, an environmental planner for the City of Boerne who hunts on a private ranch downstream of Urbanczyk’s property, thinks the broader effect of increased pumping from the Trinity Aquifer will be anything but sustainable. The groundwater Texas Water Supply is pumping from northern Bexar County and shipping to southern Comal County “will forever change the landscape,” he said in a Sept. 9 email.
“Not only will there be negative impacts from a natural resource management perspective, but with our state government code restricting a county’s ability to plan and manage growth, we will see overall negative impacts on quality of life and irreversible land use changes throughout this part of the Hill Country,” Bass wrote.
The company’s efforts to complete the pipeline from northern San Antonio to Urbanczyk’s ranch has stalled as it and a partner company await a ruling in a lawsuit with the City of Bulverde over whether the company’s construction work is violating Bulverde’s ordinances regulating tree-cutting.
Gaming eminent domain law
Texas Water Supply is building the pipeline through an agreement with South Comal Water Supply Corporation, a nonprofit formed in 2016.
For-profit water companies don’t have the authority of eminent domain, a power that governments typically exercise to acquire land from unwilling sellers. Under Texas law, however, nonprofit water supply corporations do.
“I think [Texas Water Supply] maybe figured out an end-around,” by partnering with Comal WSC, said Carly Barton, an attorney with Braun and Gresham, a Dripping Springs firm that often represents landowners fighting eminent domain lawsuits.
A legal filing from Texas Water Supply states the company has “entered into various agreements with South Comal WSC involving the production, transportation, and provision of wholesale water in northern Bexar, Comal, and Kendall counties and surrounding areas.”
Sure enough, landowners along the companies’ desired pipeline route have been are facing eminent domain threats from the nonprofit.
That includes Lynn Graham, whose former ranch land in northern San Antonio has been in her family for generations. The former cattle ranchers divided the property among their children, and Graham ended up with the roughly 37 acres where she and her husband live along Blanco Road.
In 2019, Graham first heard from surveyors representing South Comal WSC wanting to route the pipeline over her land. Threats of eminent domain soon followed.
Graham shared an email thread with the San Antonio Report that shows how in August, Graham’s lawyer was discussing the property acquisition in an email thread directly with Texas Water employees, including Meier and general manager Rex Walker.
“I have never physically met a South Comal Water Supply person,” Graham said. “Even the signature on the contract is just a line, and there’s no printed name.”
Deciding her chances were better outside of court than in, Graham agreed to sell an acre and a half of her land. She hasn’t gotten paid yet. She said she’d say no to the money if Texas Water Supply would let her out of the contract.
“The only reason the land got sold is because of [the threat of] eminent domain,” Graham said.
It’s not clear that South Comal WSC has actually exercised eminent domain by taking any landowners to court yet. As of 2020, no cases had been filed, according to the most recent annual report from the Texas Comptroller. A search of court records in Comal and Bexar counties also showed no results.
Nonprofit water supply corporations may have eminent domain authority, but they’re also typically bound by Texas open records laws. However, attempts by Barton to learn more about the connection between South Comal Water Supply and Texas Water Supply have been blocked by the Texas Attorney General’s Office.
On May 20, Barton filed a request seeking “documents and correspondence” regarding the two companies’ relationship and the pipeline route from Bexar County northward.
South Comal appealed the request to the Attorney General’s office. In an Aug. 2 opinion, Assistant Attorney General Emily Kunst sided with the pipeline company, blocking the release of the records.
Kunst agreed with the company’s assertion — while it may be a nonprofit water supply company that would fall under Texas open records law, it doesn’t have any customers yet.
“You explain the corporation was formed ‘to provide water service someday, [but] it does not actually do so currently nor has it constructed any pipeline to serve this purpose,’” Kust wrote, adding that the company also isn’t currently exempt from property taxes.
“We, therefore, conclude the corporation is not a governmental body under the [Public Information] Act at this time,” Kunst’s opinion states.
What bothers Graham most is that Texas law allows essentially allows a private corporation to force a private landowner to sell their property.
“I will do anything in that world somehow to hold them accountable for using a power of condemnation in a private setting,” Graham said. “I just am so pissed off about that.”
Correction: Due to an editing error, a previous version of this story included an incorrect affiliation for attorney Carly Barton.