Before becoming South Plains Water Supply Corporation (SPWSC) in July 2023, the system was an investor-owned utility in Lubbock, Texas, owned by Marion Smith.

Smith had tried multiple times to sell the system without success and passed away over a year ago, leading the Public Utility Commission (PUC) to appoint temporary managers. The first manager, Nuewco, eventually backed out, and Central States Water Resources (CSWR) took over.

The system, serving 288 customers across Cox Addition, Plott Acres, Town North Estates, and Town North Village, had been neglected for years, leading the Environmental Services Team at Communities Unlimited (CU) to step in due to water quality concerns.

CU West Texas Coordinator Kurt Grant was heavily involved with this system that suffered from high concentrations of nitrate and arsenic.

Environmental consultant Ken Rainwater, along with Mark Pearson of CU, suggested forming a WSC. Robert Sheets, an experienced consultant for Anser Advisory out of Florida, was brought on to assist, and on July 13, 2023, SPWSC was officially formed. Sheets has a track record of helping local governments turn around troubled systems.

South Plains Water Supply Corporation was formed after a private owner passed away and the system was headed towards receivership
South Plains Water Supply Corporation was formed after a private owner passed away and the system was headed towards receivership

“Our organization has done this on a number of occasions in Florida,” Sheets said. “We come in on behalf of the local governments and take over troubled systems, turning them around, managing them under central ownership, and turning them into good, clean, reliable systems. We wanted to take those skills and see if we could apply this in Texas.”

At the formation meeting, seven customers from the system were appointed to the board, and the Bylaws and Articles of Incorporation were approved. Smith says this meeting was on a Friday afternoon and he expected maybe 10 people to show up. There were 50 people in attendance. For two hours, locals, including Grant from CU, listened to complaints about the water quality.

“It was just one horror story after a horror story,” Sheet said. “One of the participants said, ‘Why doesn’t the state just take over?’ We said, ‘Well, they have.’ That’s the model you are working under right now. This is under state control. I’ve appointed a temporary manager, and this is what you got. This is one step short of receivership.”

The goal of SPWSC was to allow customers to take control and responsibility for the system. They applied for a $3 million grant from the Texas Water Development Board (TWDB) but needed to take ownership of the assets to receive the funds. Anser Advisory secured a Pre-Development Engineering (PDE) loan to cover costs until ownership was transferred.

Community members at a meeting with CU and Environmental Consultants discuss the formation of a water supply company
Community members at a meeting with CU and Environmental Consultants discuss the formation of a water supply company

“For the first six to nine months, everybody was working at risk,” Sheets said. “They received no payments for their work from July 2023 until March 2024. We all knew the risk going into it.”

Sheets described the challenge of finding someone from the Smith family, as the only remaining member was an 87-year-old widow. Rainwater suggested visiting their house, and the widow’s daughter welcomed them. Mrs. Smith viewed the property as a significant liability and had no objections to selling it to SPWSC.

They needed to conduct due diligence to understand the property’s condition, verify ownership, and resolve any outstanding leases. After completing these steps, they planned to present a formal offer to the Smith family and proceed to closing, pending approval from the Administrative Law Judge and the PUC.

They anticipate by July 2024, SPWSC will become the permanent owner and begin receiving grant funds to address water quality issues. The grant funds will change the trajectory of this water system.

Previously, CU’s Lending Team provided a loan for arsenic treatment, and in April 2024, CU Environmental Lender Chris Ranniger worked on a $250,000 loan to help get PUC approval for the sale. The old loan would be paid off using proceeds from the TWDB grant, allowing SPWSC to make necessary repairs and improve the water system’s safety, compliance, operations, and customer service.

“This story was the proverbial having to herd cats,” Sheets said. “You’re always dealing with different issues and hurdles. It was like playing the old arcade game the whack-a-mole. But we have a group of dedicated professionals all working together. We were all focused on trying to accomplish the same thing. This situation was so critical that everybody wanted to see it succeed.”

Both Grant and Ranniger stated that the people involved with SPWSC have proactively secured their future by establishing this entity.

“The water quality for the customers will improve, proving that all of this work is worth the effort.”

— Kurt Grant, West Texas Regional Coordinator, Communities Unlimited

“I’m so thrilled for South Plains WSC,” Ranniger said. “The hard work was done by Robert and Kurt. Their passion and determination are what got this done.”

Sheets credited CU as a critical link in the chain, emphasizing that this story should give hope to other rural communities in need of safe drinking water and demonstrate that resources are out there to help them.

“This story is proof that good things can happen,” Sheets said. “There is hope for small, rural communities like this.”