City seeks grant to keep Oil States
By DAVID LOWE Staff Writer

The city is applying for a $1 million grant in an effort to keep Oil States Industries in Lampasas.

The City Council on Monday voted 7-0 to submit an application for a Texas Capital Fund "jumbo" grant that would provide for water and sewer extension at the industrial park on U.S. Highway 183.

In negotiations with the city, Oil States officials said the company needs room to expand simply to maintain its business. Oil States hopes to add about 50 more jobs, City Manager Michael Stoldt told the Dispatch Record Wednesday, but the company also has indicated it cannot continue its current production levels without additional room in Lampasas.

Oil States has not yet committed to remain in the city, as the company is evaluating costs at a proposed site in Oklahoma, Stoldt said.

"Obviously, for us to win them locating here Texas Capital Fund is an integral part," the city manager added at the council meeting. "Without utilities there and road extension on site, it cannot be developed, and they cannot build there."

The city offered Oil States 10 acres in the industrial park on U.S. Highway 183, but the company will receive the land only if Lampasas gets the $1 million grant. The grant carries a matching requirement, meaning if Lampasas receives funds Oil States would have to construct buildings and improvements totaling at least $1 million.

Stoldt said the company did not try to coerce city officials by mentioning Oil States' consideration of the Oklahoma site. The company was attempting to underscore job retention concerns, he said.

"It was never thrown to us as a threat," the city manager told the Dispatch Record. "It was never a way to leverage more money out of us. It was always approached as, 'How can we work together to solve this?'"

Oil States officials did not return Dispatch Record phone calls seeking comment.

Texas Capital Fund normally awards only two "jumbo" grants per year, and it already has given out one. Applicants for the grants -- designed to help small communities -- receive points for a variety of factors, including poverty rates that exceed the state average, low to moderate median household income, and the number of jobs created and retained.

In addition, low- to moderate-income workers must fill at least 51 percent of the jobs created.

Lampasas has received $1.4 million in Texas Capital Fund grants since 1994. The city received a $250,000 water grant in 2006.

In an energy agreement similar to last year's, the council voted to allow the city of Georgetown to purchase Lampasas' 10 percent market pricing option -- 2.3 megawatts -- for 2008. Large cities often try to purchase electricity on the open market to obtain cheaper power than is available at the Lower Colorado River Authority's wholesale rates.

Stoldt said the option holds no real value for Lampasas, though, as the city does not have staff to track open-market rates.

"I consider it helping each other out," Public Works Director Randy Clark said of the Georgetown purchase agreement. "I like to stay in good shape with our neighbors."

Lampasas will continue to buy all its power from LCRA, the public works director added.

Mayor Judy Hetherly and council members Robert McCauley, Jerry Grayson, Wanda Bierschwale, Les Gerhardt and Debbie Fuller voted to approve the sale, while Mayor Pro Tem John Cole was opposed.

The council also set dates for the first and second readings of the proposed 2007-08 city budget. The first vote will be Sept. 4 at 5:30 p.m., and council members will consider final adoption Sept. 14 at 8 a.m.

Stoldt also explained a series of water-related developments. Natural Resources Conservation Service officials visited Lampasas Aug. 23, the city manager said, and indicated the city should be eligible for NRCS funding for debris removal, even though presidential and gubernatorial disaster declarations have not included Lampasas' most serious flooding.

The city continues to seek recognition from the Governor's Division of Emergency Management and may apply for NRCS funding to repair retaining walls in W.M. Brook Park, he said.

Although Stillhouse Hollow Lake remains full due to heavy rains earlier in the summer, debris and high water are making water difficult to treat, Stoldt said. Whereas Lampasas' water supplier normally treats 14 million gallons per day, water quality is beginning to decline after about 7 million gallons each day.

Stoldt said citizens should be aware the city may have to institute water rationing because of quality problems, not because of a low supply. "We're not asking for any rationing at this point," he said, "but considering the situation we have, we may have to go to rationing at some point."