Rural Water System Ownership Takes Hold in Shallowater, Texas

On a Friday afternoon in July 2023, organizers in Shallowater, Texas, expected maybe 10 people to show up for a meeting.

Fifty did.

For two hours, customers from four small water systems described what it was like to live with their water, while Kurt Grant, then Communities Unlimited’s (CU) man on the ground, listened alongside them. By the end of the night, they had voted to take the systems over themselves, adopting bylaws and forming South Plains Water Supply Corporation (SPWSC).

A Decade of Crisis Management

“It was just one horror story after a horror story,” said Robert Sheets, a consultant who helped run the meeting. “One of the participants said, ‘Why doesn’t the state just take over?’ We said, ‘Well, they have. This is one step short of receivership.'”

Getting to that meeting took the better part of a decade. CU’s relationship with the system goes back eight years, to when it operated under private ownership as Smith Management. CU’s Lending Team provided a loan in 2018, and the Texas Water Development Board (TWDB) added a forgivable loan on top of it, money meant to repair wells and bring the system into compliance with state water regulations.

It wasn’t enough.

After the owner passed away with an outstanding balance on the CU loan, the system entered a period of transition. The state appointed temporary managers, first Nuewco and later Central States Water Resources (CSWR), to maintain service while the community continued to contend with elevated nitrate and arsenic levels in the water.

Consultants Push for a Different Path

That combination, contamination and years of system challenges, is what drew in CU’s Community Infrastructure Team and, with them, a small group of consultants, Sheets among them, previously with Accenture. Sheets had a track record of helping local governments turn around troubled systems.

The small group of consultants agreed on one thing: another temporary manager wouldn’t change anything. New ownership might. Customers from Cox Addition, Plott Acres, Town North Estates, and Town North Village put that theory to a vote that July.

Financing the Purchase and the Repairs

Owning the system was one thing. Paying for it was another. In April 2024, CU issued a second loan, this one to SPWSC itself, covering the legal work and due diligence needed to close the purchase and win state approval for the sale, approval that TWDB funding was waiting on before it could be released. Once that came through, the $3 million TWDB forgivable loan began flowing into repairs across all four systems and paid off the debt Smith Management had left behind, work that continued through 2024 and 2025.

Fast forward to now, the corporation is no longer just managing crises. Bates said it’s planning years ahead for water quality and supply. She credits CU with building that momentum and connecting SPWSC to the technical and financial resources needed to keep moving.

“It’s amazing,” said SPWSC General Manager Lanita Bates. “The way the customers and members have stepped up has been incredible. When South Plains was formed, there weren’t any clear solutions. Now we have a functioning board, local ownership, funding secured, and a path forward. That’s a lot of progress in a relatively short amount of time.”

A Second Grant Builds on the Momentum

The long-term thinking paid off again in February 2026, when SPWSC secured a second TWDB award: a $3.3 million grant, funded through the state’s Rural Water Assistance Fund (RWAF), for wells, system infrastructure, and meter replacements, aimed at bringing safe, reliable water to the system’s nearly 300 households.

“It’s a significant step forward, but it’s not enough to solve all of our long-term challenges, especially our water quality issues,” Bates said. “For a rural utility like ours, though, $3.3 million is a major investment. It gives us a foundation to build on.”

A Team Effort Behind the Scenes

“Communities Unlimited has been a tremendous partner throughout this process,” Bates said. “But it has taken truly a team effort.”

“The SPWSC’s ability to secure $3.3M grant from the TWDB rests largely on the efforts of dedicated volunteers, CU, and TXAWWA who identified the communities at risk, developed original conceptual plans, prepared the applications for an entity yet to be created to be able to secure and put the funding to beneficial and intended use,” said Carlos Rubinstein, Assistant System Manger. “That entity is now SPWSC, but it all would not have happened without CU and TXAWWA initial volunteer assistance and dedication.”

Ownership as the Real Accomplishment

While SPWSC still needs more an estimated $13 million to fix the entirety of their water infrastructure issues, the system is celebrating the small win for now. Ask Bates what she’s proudest of, and she’ll point to the community-driven approach to getting SPWSC turned around for the better.

“Our biggest accomplishment has been empowering this community to take ownership of its future,” Bates said. “That’s what we’re continuing to do, by involving residents and making sure they have a voice in the future of their water system. We’ve come a long way, but there’s still a long way to go. Ultimately, I want this community to have the resources, support, and water quality it deserves. We’ve accomplished a tremendous amount, but we’re not finished yet.”