As the discussion of a merger between the Town of Trophy Club and Trophy Club Municipal Utility District No. 1 (TC MUD 1) continues, the third organization affected by the proposed consolidation, Town of Westlake, has officially taken a stance. A document dated August 19, 2013, and written by Westlake Mayor Laura Wheat, was delivered to TC MUD 1 last week for review and action. The offer from Westlake includes a buyout of TC MUD 1 from Solana for over $1.8 million cash, with the estimated total value benefitting TC MUD 1 to be $6.6 million in payments, assets and savings.
The offer letter states that the Town of Westlake desires to provide water and sewer services to customers within the town boundaries and wishes to remove the dual tax burden on Solana that exists today. Additionally, the need to expand the wastewater treatment plant to accommodate Solana development would be removed, thus saving Trophy Club tax dollars. The offer is based on three methods of cost-benefit analyses:
1. Examining the proportionate share of debt on a pure ad-valorem ratio basis, and
2. A review of the IBM/Gibraltar “agreement” to determine remaining debt attributable to the agreement, and
3. Examining the current Solana rate and tax revenues less the estimated exit savings in expenses and estimating the remaining revenues under the current agreement.
Based on the analyses, the consistent and achievable financial strategies “strongly suggest that now is the time to make the transition.”
According to Westlake’s offer, TC MUD 1 customers would remain whole while allowing the Town of Westlake to repay all proportionate TC MUD 1 outstanding debt, provide compensation for the remaining depreciation value on TC MUD 1 assets in Westlake and honor the obligation remaining in the Solana/TC MUD 1 agreement.
The TC MUD 1 Board considered the Westlake Buyout Offer at the August 27, 2013 TC MUD 1 meeting during the Executive Session. The TC MUD 1 Board directed their attorney to prepare a letter to send to Westlake in response to the submitted proposal.