San Marcos council tables emergency water sale to Kyle, shortens term in revised deal

The San Marcos City Council spent more than three hours debating proposed water agreements with the city of Kyle, ultimately tabling the longer emergency water supply contract and approving a shorter interim arrangement to preserve emergency access while staff completes follow‑up work.

Council members pressed city staff and Kyle representatives on three main points: when and how San Marcos could refuse to open the interconnect during local shortages, the wholesale pricing for treated water, and the length of the contract. Paul Cott, assistant director for water, told council the proposed rate of $6.42 per 1,000 gallons reflects the city’s published wholesale rate; he said the city’s net revenue from prior interconnects has been modest (staff cited roughly $152,000 in total revenue since the arrangement’s inception). Kyle utilities assistant director Tim Sanford said Kyle uses the interconnect only when they face outages or supply failures; Kyle drew roughly 2.8 million gallons through the interconnect last year, he said.

Several council members said the proposed 10‑year initial term with two five‑year extensions felt too long for what the city defines as an emergency interconnect. Council members proposed shortening the initial term and/or the extension lengths so San Marcos could revisit the deal as Kyle finalizes its drought contingency plan. City staff pointed to contract sections allowing termination for default and to a clause (section 4.02) that the city would not be required to supply water if San Marcos experienced shortages. Council members and Kyle officials discussed aligning triggers for drought stages and whether Kyle would be required to meet or exceed San Marcos drought restrictions.

After debate, council voted 7–0 to table the emergency treated‑water interconnect initially so staff could return with clarified provisions; later the council approved a one‑year interim agreement (effective retroactive to the prior agreement’s expiration) to preserve emergency access while both cities finalize drought‑plan details. The shorter term was proposed to give San Marcos more frequent review opportunities and to avoid locking the city into a long arrangement while Kyle updates its drought rules.

On a separate but related item, council reviewed a proposal to transfer a block of Edwards Aquifer groundwater rights to Kyle (a paper transfer rather than immediate sale of treated water). Staff and the Kyle representative explained that a paper transfer assigns permitted withdrawal rights under the Edwards Aquifer Authority (EAA) framework and does not move treated water today. Council members debated whether a paper transfer could be used to exceed permitted capacity and asked for clearer limits and reporting on how Kyle would use the rights. Council postponed consideration of the groundwater‑rights transfer until Kyle’s revised drought contingency plan is complete and staff can provide additional detail; that postponement passed 6–2–1.

What’s next: staff will return with clarified contract language about termination and drought‑stage triggers and additional documentation from Kyle about how the transferred rights and any proposed treated‑water use would be restricted under EAA and state law. Council also asked staff to provide the history of prior agreements and a clearer financial analysis of revenue and cost implications for San Marcos.

Quotes: "If another major flood comes, this bridge could become a dangerous obstruction," warned a public commenter, Rosa Aponte, in an earlier citizen comment about river maintenance — a note many council members said underscored the local emphasis on water risks.

"This is truly an emergency‑based supply," Assistant City Attorney (counsel) told the council, explaining the regulatory constraints that limit when treated water can be delivered under state rules.