Commissioner Whisenant explained that part of the indicative offer includes a confidentiality agreement will be signed, so there are many details that will not be shared with taxpayers. This is unacceptable
Note: We can't figure which is worse – the county going down its fiscal tracks blind and at a high rate of speed, or pulling the blinds on the taxpayers of Hays County. If anyone's got an answer, let us know. Now the court and commissioners are stonewalling requests for public information regarding the details of the county's involvement in a headlong rush to purchase a collection of failing water and wastewater systems from the LCRA. Not a good sign.
Two related items are on the agenda for Tuesday's April 19 commissioners court meeting: No. 26 – "Discussion of material relating to the Hays County Water and Wastewater Authority and/or the LCRA divestiture (Whisenant)" and No. 17 – "Discussion and possible resolution of the Commissioners Court accepting a petition for the creation of a "Coalition of Central Texas Utilities Development Corporation"; approving the Articles of Incorporation, Bylaws and Directors of said corporation; and authorizing the County Judge to execute an Interlocal Cooperation Agreement between Hays County, the City of Leander and the City of Bee Cave related to LCRA's intent to sell its water and wastewater systems (Whisenant)."Are commissioners and County Judge Bert Cobb making promises with the taxpayers money that the taxpayers have no earthly idea what they're paying for or how it will be paid? It sure looks that way. We hope more folks will join Sam Brannon, author of the letter below, in asking questions and demanding answers.
Send your comments and questions to roundup.editor@gmail.com, to Mr. Brannon at sam_brannon@hotmail.com, to Judge Cobb and Commissioners at bert.cobb@co.hays.tx.us; debbiei@co.hays.tx.us; mark.jones@co.hays.tx.us; will.conley@co.hays.tx.us; ray.whisenant@co.hays.tx.us or click on the "comments" at the bottom of the story
Judge Cobb and Commissioners Ingalsbe, Jones, Conley and Whisenant:
Last week I wrote you sharing some concerns about the LCRA initiative. This week I'm writing again asking for NO ACTION on this item this week.
In less than 11 months, Hays County will be carrying $357 million in debt. The taxpayers are extremely cautious about taking on any unnecessary debt, costs, or risk. We want very deliberate and open process on this discussion, and straight answers with little-to-no effort expended to get them.
Last week's commissioners court conversation was very light on details, as Commissioner Whisenant explained that LCRA has not been very responsive in getting information out.
Tuesday, we'll be looking for much more detailed answers to many points, including the following:
– We've been told that LCRA serves 3,000 Hays County retail customers, and an estimated 7,000 through other water companies/MUDs.
We want to know how being involved in the acquisition of these assets serves the 157,000 people who call Hays County "home." Who are the members of the "coalition"? The incorporation paperwork only listed Hays County and Bee Cave (pop. 2,000) and Leander (pop. 26,000), which doesn't represent much of a coalition. Where is Travis and Williamson County, Rock Rock and Austin?
Commissioner Whisenant mentioned 20-30 other members last week, but when I asked him for a list of the members and prior meeting dates, he had his assistant, Linda Kinney, forward the request to Mark Kennedy as an FOIA (Freedom of Information Act request). Kennedy suggested it may have to go to the Office of the Attorney General for review. This doesn't reflect well on the court's intentions as fiduciaries on behalf of the People of Hays County.
Commissioner Whisenant indicated that the City of Dripping Springs was not a member of the coalition at this point. Since the customers are primarily in the Dripping Springs area, wouldn't it make more sense for Dripping and the local MUDs or other entities to take part in the coalition rather than Hays County? And if Dripping and the local MUDs and other entities are not willing to handle this themselves, most folks in Hays County would likely not want the bother/expense/risk either.
Commissioner Whisenant also indicated that Hays County's investment would be large, more than we can afford in cash, so debt would be issued. The backup paperwork seemed to indicate that the corporation would not be assuming debt on behalf of the People of Hays County, or offer the taxable property in Hays as collateral. We'll be looking for clarification on this.
– What is the significance of May 23rd? Is that LCRA's offer deadline? What has to happen by then, and why then? Other than the initial meeting when the LCRA representative originally presented to the court, the only meeting held about this was last week, and little came from it, and Commissioner Whisenant admitted he knew little of what was going on.
– Who is/will be performing the due diligence on the purchase and when will it begin? Last week I asked whether every reasonable alternative to Hays' participation has been considered. Commissioner Whisenant indicated that Hays' involvement with the "coalition" was the only option being pursued. If only the approximate 10,000 customers are affected, then there may be other numerous options including Dripping and the 4 locals MUDs participating (rather than Hays), or the customers forming their own co-op. These make much more sense than involving everyone across Hays County in a project with such a narrow benefit.
If the primary interest is to service new development, then we should be discussing it in those terms. For instance, if there are 2,500 lots planned that would benefit and the portion of the assets that serve them comes to, say, $5,000,000, then the developers could make the investment and just add $2,000 per lot.
In short, you have the fiduciary responsibility to limit cost and risk to Hays County taxpayers, and fully evaluating alternatives is part of that. I've heard that this acquisition has been discussed for some time by members of the "coalition," and that a broader strategy may be in play. If that's the case, Hays taxpayers want to know about it, and we should look at the options in that context.
Commissioner Whisenant also indicated that this initial purchase may require subsequent investments. These should be fully disclosed. The LCRA assets are money losers by their own admission. Is Hays County willing to lose money on the delivery of water to current customers?
Commissioner Whisenant explained that part of the indicative offer includes a confidentiality agreement will be signed, so there are many details that will not be shared with taxpayers. This is unacceptable. LCRA is not in the driver's seat on this deal – they're trying to unload some money-losing assets. If we cannot negotiate an agreement that allows for the details to be discussed openly with taxpayers, then Hays County should not be entering any agreement related to this purchase.
We're looking forward to a very informative meeting on these and other points.
24 comments:
I hope the streaming video will be turned on this week for those of us that are unable to attend. It wasn't turned on until the court was almost over last week, Grrrrr.
What sort of an entity is a
"coalition?" Is it a MUD, a Public
Utility Agency (PUA), or something
else?
The secrecy with which this whole
LCRA affair is proceeding is
suspicious. We taxpayers know that
we (not the developers this affair is likely meant to service) will be
paying for any purchase from LCRA,
and it is our right to know what
our taxes will be spent for.
Why does Hays County want to buy
ANY LCRA water facilities? Three of our five current HTGCD Board members maintain that there is plenty of groundwater here, and
that the water level in Hays County
will fall only 19 feet in 50 years.
What, me worry?
And then is the little matter that
LCRA is selling the plants in the
first place because they are losing
money hand over fist. Plus most --if not all -- of the plants need
repairs and/or need to be enlarged.
You add that cost to the losses AND
to the purchase price for the plants, and you come up with a
NO NO NO from any financial advisor.
Why should Hays County climb aboard
this train to disaster?
From a Nov. 24, 2010 letter from
LCRA to its customers:
"In considering proposals from potential buyers [of the 32 sites],
the General Manager [of LCRA] will
include the following factors in his consideration:
* the ability and commitment of the buyer to provide reliable and quality utility services;
* the ability of the buyer to
INVEST CAPITAL for additional, necessary water and wastewater
utility infrastructures;
* the commitment of the buyer to meet applicable regulatroy requirements; and,
* the willingness of the buyer
TO COMPENSATE LCRA for its investment in water and wastewater
utility systems."
From March 30, 2011 newsletter from
LCRA concerning divestiture of 32
water and wastewater facilities:
"Three speakers addressed the Board about the potential sale at the March 23 Board meeting....[Ray]
Whisenant thanked the Board for saying it would work to accommodate the needs of cities and
municipal utility districts that
want to submit a joint bid and said the group would work 'diligently' to conduct the work necessary to submit a bid."
The above seems to imply:
1) that LCRA WILL entertain sales smaller than the whole 32 properties at once; and,
2) that Commissioner Whisenant is forming a "group" -- possibly
including MUDs -- to submit a joint
bid for some of the properties.
Will he tell us who the group members are?
As Sam Brannon has asked, why is not the City of Dripping Springs -- instead of Hays County --negotiating for the sale of the
LCRA Dripping Springs and Bee Cave
facilities?
Also, if Hays County will buy the
DS and Bee Cave properties to benefit an unincorporated area
near Dripping Springs, will the
county also buy the Aqua Texas
facilities (which UNDOUBTEDLY
need repair and expansion) for the
unincorporated Woodcreek North area
near Wimberley?
The whole county should not have to pay for a water or wastewater
system to benefit only one locale.
Are these facts related?:
1) Rep. Jason Isaac has filed HB
3832 which creates Hays County
Development District #1 (HCDD). That body seems to be a vehicle to provide for Caliterra, and it can
issue bonds.
2) HCDD can contract with a private
company for "a supply and distribution facility or system to provide potable and nonpotable water to the residents and businesses of the district, including a wastewater collection
facility."
3) Whisenant & Lyle are making application for some sort of permit
from HTGCD on April 28 in Dripping
Springs.
4) Hays County Commissioners Court
will meet on May 3 to adopt changes
to Hays County Development Regulations.
It is very simple to figure out what is going on regarding these prospective water system purchases.
FOLLOW THE MONEY AND PEOPLE TRAIL - such as 1) past campaign contributions, 2) people invited to private meetings organized by the various county commissioners, 3) developers behind the proposed subdivisions and their relationship with the commissioners, etc.
If Brannon and his newsletter cronies were worth the respect they seek as county budget accountability experts they would investigate the money and people trail and make the findings public - instead of simply asking the County Commish to submit the rationale and the logic of such purchases for all to see.
The rationale for the LCRA waste water system purchase is like asking a downtown Wimberley restaurant owner if they should pay for their own wastewater treatment service - or have it paid for with an ad valorem tax. Which one do you think they would choose?
Today we left the Commissioners Court with a 2-2 vote (Conley was missing, with no explanation offered) on the agenda item to create the "Coalition Corporation" to move forward on submitting an offer on the LCRA properties. With the 2-2 vote the motion failed.
Big props to Commissioners Ingalsbe and Jones for standing firm on "no action", in spite of Cobb's stares of intimidation toward them.
Comm. Whisenant indicated the item would turn up again on next week's agenda. Presumably, Conley will be there.
Honestly, this ranks up there with last week's meeting as one of the most bizarre court meetings I've witnessed.
Whisenant & Cobb talked about how open the process has been on the LCRA asset purchase, even though precious little has been shared. Hix Powell (representing the City of Leander) spoke of 20 members of the "coalition", and Comm. Whisenant spoke of past meetings of the "coalition".
But when I reiterated my request for a list of the "coalition" members, and dates of their past meetings... No answer.
Todays estimate by the court was that the LCRA lines serve 5,000-10,000 customers, all in northern Hays County. Hays resident Barbara Hopson asked why the City of Dripping Springs, the two Belterra MUDs, the Dripping Springs Water Supply Corp weren't part of the coalition in Hays County's place - a very fair question that was passed by with barely an acknowledgment by the court.
Honestly... I can't tell what the hell is going on here, but I've got the feeling that if it goes forward, we're not going to be very happy about it. At the very least, we want our questions answered before moving forward.
I encourage readers and commentors here to write all five of your elected officials on this matter. Please also support Commissioners Jones and Ingalsbe for their stands today with words of encouragement to stand firm, and thank them for doing so to this point.
And to "Truth said"... sign your name and stand up, then come talk to those of us who invest heavily (and part-time) in keeping our elected officials honest in their dealings with us and on our behalf. Your offer to help will be accepted.
Perhaps Will Conley was absent from
the Commissioners Court meeting of
April 19 because he was in
Washington, DC?
Item 17 on the April 12 agenda was:
"Discussion and possible action to
authorize Commissioner Will Conley
to represent Hays County in discussion with officials from the
Department of the Interior and
others in Washington, DC."
I agree with Sam Biscoe (from Austin American-Statesman, Feb. 15,
2011):
" 'Getting into the water and wastewater business is a big deal,'
Travis County Judge Sam Biscoe said. He told LCRA representatives
that it's unreasonable to expect cities or counties to figure it out
in a couple of months."
Reunion Ranch, a Dripping Springs
subdivision, was platted by Urban
Design Group of Austin. It will be
on 524 acres and will have its own
50,000 GPD (gallon per day)
wastewater treatment plant. See
www.udg.com.
Reunion Ranch Subdivision is near
the intersection of RR 1826 and
Nutty Brown Road. Apparently no
building has begun, and the land is
for sale for $27.5 million.
(www.casecre.com)
1. The source of water for these systems is surface water
2. LCRA has the luxury of "free" access to surface water when LCRA is running the pipelines
3. The county will not have the same access to the surface water
4. LCRA can sell the systems and deny access to source water unless an agreement is in place otherwise.
5. Given the complete lack of due diligence on this purchase, has anyone figured out that the county could wind up with some very expensive pipelines and no water to pump through it?
6. Assuming the LCRA will sell some water, has anyone seen how much the LCRA will charge the county for the water that the LCRA got for free?
7. Has this price for the water been taken into account as part of the total rate package?
It is obvious to me that the seller (LCRA) is a whole bunch smarter than the buyer (County). The seller wants to be made whole up to the point of the sale and the buyer (us) will be picking up that cost as well as future losses. Does the County exist to prop up failing investments by others? If so, I still have some stock in Braniff Airlines that I purchased back in the seventies, I could let go for half of what I paid for the shares.
Seriously, I’d rather see Aqua Texas pick up that albatross.
“Ah. well a-day. what evil looks
Had I from old and young
Instead of the cross, the Albatross
About my neck was hung.”
(The Rime of the Ancient Mariner by Samuel Taylor Coleridge)
Anonymous April 20, 1:39 AM posed
the same questions to Commissioners
Court yesterday. His questions
weren't even addressed. More
secrecy.
He is so right on in asking -- if
Hays County did buy some LCRA facilities -- whether LCRA would
guarantee a specific amount of water would continue to be sold
to Hays County, and at what price.
There are simply too many unanswered questions about this LCRA deal for any entity -- whether Hays County or Dripping
Springs -- to rush to buy the
facilities.
N-Hays Investors is another group
which will benefit if Dripping
Springs or Hays County buys some
LCRA facilities. They are listed
on www.lcra.org as one of LCRA's
customers.
I'd appreciate it if someone who knows more about MUDs than I do could address this scenario:
The "Coalition" which plans to bid
on some LCRA facilities apparently
will be composed of some MUDs --
two which serve Belterra, almost
certainly, and maybe others. (A
representative from one of the 2
Belterra MUDs spoke in favor of
the Item 17 resolution in Comm.
Court yesterday.)
I know that MUDs cannot annex more
area than was originally established (without the agreement
of that proposed addition). What
I am not clear on is whether a non-MUD coaltion can be made to include an existing MUD.
If Dripping Springs or Hays County
forms a coalition to buy some LCRA
water/ww facilities, and the coalition includes MUDs, then it
seems to me that the customers in
the existiing MUDs might get a rate
break at the expense of other members of the coalition. That's
because I'm assuming that the
coalition would charge the same
rate to all its members for w/ww,
and the current members of the 2
Belterra MUDs, for example, may now
be paying higher water rates to
the MUD directors (developers) than
they might pay under the coalition
rate.
Legislation currently saves people
from being gobbled up by high-water-rate MUDs, but I'm not sure
that non-MUD water users are protected by being able to refuse to include MUD customers in a
coalition.
Maybe the Belterra MUDs would
continue to pay their current
rates to their MUDs, and the
coalition would be merely a
temporary umbrella through which
to negotiate the sale of the LCRA
assets?
Barbara,
I did ask some of the same questions posed by Anonymous April, 20 1:39 a.m., but that is not my post. Apparently some other folks share that same concern.
Thank you for your interest in this and other issues this county is facing.
Maybe Conley will be absent from
Commissioners Court next Tuesday,
also. He is up for re-election in
2012, and the way things are going
with the LCRA project, he may not
want to be in Court to vote yes on it, as Cobb and Whisenant will expect him to do.
Many thanks to Commissioner Ingalsbe and Commissioner Jones for
voting no to the resolution to set
up a pathway to purchase the LCRA
white elephants. Please hang tough when Mr. Whisenant presents the same package again next Tuesday.
(How many times will the Court vote on this issue before it accepts no as the answer?) It can't hurt you, Ms. Ingalsbe and Mr. Jones, to hold fast to your no votes on this endeavor --
it can only hurt you if you vote
yes and the public sees the
project for the debacle it is.
On Hays County Development District
No. 1 (There are two.): PART 1
I'm concerned about what is contained in Rep. Isaac's HB 3832
which is currently in a House
committee. His bill amends and/or
changes legislation that created
Hays County Development District No.1 (HCDD) back in 2001. In Nov.
2000 the voters of Hays County
approved bonds for this "development district" outside
the city limits of Dripping Springs. Whether the voters knew
all the expense they were voluntarily raining down on themselves is unknown. The original legislation gave sweeping powers to that entity, and
further stated that Broad Construction should be used in
interpreting the specific sections of the act -- that is to say,
legislators were instructed to
interpret the law in as liberal and
far-reaching way as possible when
examining the bill in the future.
The boundaries of HCDD are not given in the act, which is unusual
(and they ARE given in the act which created HCDD#2). The reader
is instead told to look up the
boundaries approved by the Hays
County Commissioners Court. The
HCDD area was created to bring Caliterra to the Dripping Springs area. Citizens were given the usual Chamber of Commerce story that the new development would bring jobs and glory to the area, and they blindly voted for a carte blanche bond proposal.
These are some (but not all) of the
powers that HCDD was given to levy
taxes, issue bonds and assessments,
and generally pass on most of the
costs of the District to anyone
except the developers of the project:
Sec. 5 POWERS
Can levy ad valorem taxes for purposes approved in the Nov.7,2000election;
Can levy taxes for maintenance;
Can issue general obligation bonds
and/or revenue bonds;
The District will bear the expense
of constructing a hotel; a golf course; water, sewer, drainage,
and road improvements; the costs
of the issuance of bonds or other
obligations; and organizational costs.
The bill was declared an emergency, was not read 3 times in
either the House or Senate, and was
fast-tracked to become law.
I'll report later on some of the things which Rep. Isaac's HB 3832 adds, changes, or deletes from this original legislation.
Given a choice between the County and Aqua Texas buying the LCRA properties I’d chose ATI, assuming we even have a choice. Anyone who knows me will recognize that I am not a fan of Aqua Texas, but they would be the best to purchase and run the utilities because that is what they do. Aqua goes all over the country buying up failing water and wastewater systems and taking over the operation of them for profit. Failing or failed systems are a very expensive investment and the costs to renovate and make the system solvent will be passed on to the customers. Frankly, if the LCRA, a nonprofit public utility had the courage to charge their customers enough to just break even we wouldn’t be having this discussion. I question, who makes up for their losses? They apparently want to pass that troublesome task of raising rates on to others and not incur any further losses in the process. That is a financially sound although cowardly decision on their part. Screw it up and pass it on, seems to be their mission statement.
Now comes our County to the rescue for reasons we can’t imagine. It would be interesting to know how the County came to be involved in something like this. What lead up to this question being presented to the Court? Right now it looks like we may have problems finding out what is going on right now. Why the apparent secrecy? I thought we were going to experience transparency in County Government. Silly me!
With all due respect, the County is a group of amateurs when it comes to business operations and accountability. In a perfect world, the people would control the excesses of government but that seems in doubt here. A government owned and run utility is usually a bank account for political favors and an alternative for tax increases. When they can’t get tax increases via the public vote, they just raise the water rates. The City of Austin developed that into a fine art back in the 70s. I know everybody seems to hate ATI but they have the bucks and the expertise to resurrect the LCRA systems. Of course it is going to cost a lot of money and rates will go up for the customers of those systems. The alternative is for the big spenders on the Court to create more debt on a money-losing venture that all County citizens will have to pay for. Does that seem fair?
I am still trying to understand why our Commissioners seem ignore the fact that our federal government is in financial peril due to over spending and borrowing. Are we somehow immune to those dangers here in Hays County?
Sam Brannon has been a controversial individual and a fly in the ointment of the Court lately, but I’m beginning to believe he is on track in publicizing the County’s debt problems. We as a bunch of willing financiers have trusted government to manage the tax revenues we send them every year and it may be that we were naive. We need watch-dogs like Sam and his team to keep the ship of government on an even keel. You Go, Sam!
I agree with Richard Sullivan. As
much as I despise Aqua Texas, they
should be the buyer of the LCRA properties instead of Hays County.
Rates are going to go up for the
current LCRA customers no matter who buys the LCRA facilities. LCRA has been subsidizing the facilities to keep the rates artificially low for its customers; a new buyer won't do that.
And this may sound uncharitable,
but if Aqua Texas buys the facilities, only the actual users
of them (at most, about 10,000
people in Dripping Springs area) will be paying for them -- not citizens of the whole county.
Anonymous @ April 21, 2011 10:30 AM
I do hope you are right about, ”a new buyer won't do that”, but I have a fear that the Commissioners will want to set up some kind of tiered rate structure based on the ability to pay or some other giveaway or maintain the old inadequate rates and subsidize the balance. Remember they are politicians and as such they never pass up a chance to be seen as charitable. They are in perpetual campaign mode and always have something up their sleeves besides their arms.
Richard,
I agree with you that politicians
are always in campaign mode and are not beyond subsidizing water
rates to placate a few constituents. All the more reason
not to let Hays County buy the LCRA properties.
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