Ron Kelly (WSC board president) called to say that our request for documents and correspondence was costing the WSC a lot of money and that we should come to him if there were any concerns about him or the WSC board. Kelly repeated that he, “had a lot on his plate and our open records request was interfering with his efforts and the WSC.”
Water supply's service area
(Click on map to enlarge)
Note: Photos of the officers and directors of the Drippings Springs Water Supply Corporation are no longer posted on the water supplier's website, nor will you find anything about their background and bios. DSWSC is a member-owned water utility. It serves about 1,400 home and commercial customers in the Dripping Springs area. The board is holding its first meeting tonight (Monday) since GM Doug Cones' firing at 7 p.m. at the corporation's headquarters, 101 Hays Street, Suite 406. Meanwhile, Cones' attorney says they are evaluating possible legal action. And the Texas Attorney General's Office will not confirm reports that it is investigating the operations of the DSWSC.
Send your comments and news tips to roundup.editor@gmail.com, to Charles O'Dell at codell@austin.rr.com, the Dripping Springs Water Supply Corporation, 512.858.7897, or click on the "comments" at the bottom of the story
By Charles O'Dell
Contributing Editor
A newly appointed board majority did what three previous members of the Dripping Springs Water Supply Corporation (WSC) board who were forced out of office by a recall election last April for trying to do – fired its long-time General Manager.The new board majority, appointed in April to replace the three ousted board members, fired General Manager Doug Cones in a 3 – 2 vote at a special meeting held September 19, 2011. The firing of Cones came after a closed session. Board president Ron Kelly would only say the firing was, “For cause,” but indications are that personal motives, official deception and outside interests may be behind the action.
Cones served as General Manager for more than twenty-four years. During that time the public water system consistently received a Superior rating from the Texas Commission on Environmental Quality (TCEQ) and customer/members consistently gave water service high marks.
Former Dripping SpringsWSC GM Doug Cones
Many Corporation members are confused and disappointed by the board action that appears to be based on earlier claims against Cones already proven to be false, and new unsubstantiated claims apparently fabricated by board president, Ron Kelly, with help from Dripping Springs city officials.
“I don’t know who’s running the water system now,” said one WSC member.
Less than six days after the abrupt firing of Cones there was loss of water pressure in Meadow Oaks, a Dripping Springs subdivision. WSC personnel attributed the loss of water pressure to a “computer glitch.” The official explanation was that a computer indicated the nearby storage tank was full when it wasn’t. Then three days later water pressure failed for a second time in the same subdivision. This time it was, “lightening striking the equipment,” according to office personnel.
“When I tried to shave and take a shower early Sunday morning there wasn’t sufficient water pressure,” said Terry Phillips, a retired Ag teacher, who lives in Meadow Oaks. “I called the office but no one answered. Then I called Doug Cones WSC cell phone and finally Cones home phone before reaching him. Doug told me that he no longer worked for WSC,” said Phillips.
When Phillips moved to Dripping Springs eleven years ago, “The first person to introduce himself was Doug Cones,” Phillips said. Cones gave Phillips four telephone numbers to call if ever there was a problem with his water. “Any time day or night,” Cones had told Phillips.
“We hope the water is safe now,” Phillips said.
Unanswered Questions
When contacted by phone, Kelly identified the interim operator to be PGMS of Dripping Springs. Kelly said he entered into a $6,200 a month “rollover” contract with PGMS to “oversee the water system until a new GM was hired.” When asked how PGMS was selected, Kelly said, “Our attorney, Phil Haag (McGinnis, Lochridge & Kilgore) recommended them.” In a later telephone call, Haag said that, “I don’t know how PGMS was selected.”
Other contradictions exist and unanswered questions remain. Who authorized Kelly to enter into a contract with PGMS, and to do so without a public bidding process? Who is telling the truth about how PGMS was selected? Who wrote the “rollover” contract with PGMS? Who signed the contract without board authority? Why was Cones fired before an interim operational plan had been approved by the board and put into place?
HaysCAN has filed open records requests with the WSC, the City of Dripping Springs and the Texas Attorney General seeking documents that will help answer these and other important questions, and determine if the firing was justified or retaliation.
Kelly was elected board president after he and his two fellow board members were appointed in April to replace Steve Harris, Larry Brewer and Gilbert Wolf, all who resigned rather than face a recall election count. While the three new board member credentials looked impressive enough, they did not prepare anyone for what was to follow.
Initially, Kelly and Cones appeared to get along well enough. Cones continued managing the Water Corporation operations and Kelly concentrated on WSC policy. The previously ousted board members had actively engaged in micro management of the water operations in clear violation of Corporation By-laws.
Kelly began acting outside the collective authority of the board by taking actions on his own and then asking the board to, “ratify and approve” his unauthorized actions. This can be seen in various board meeting agenda, including the October 3, 2011, agenda.
The September 29, 2011, News-Dispatch edition reports that, “Kelly said a comprehensive plan for the future of the WSC will be presented to members and the public at the next regular board meeting October 3.” A review of board minutes didn’t produce any board approval of such a plan, and the board members we spoke with weren’t aware of any such plan having been authorized.
In a September 29, 2011, letter to his fellow WSC board members, Board Vice President, Jim Walden, listed 7 specific actions that Kelly engaged in outside his authority.
Hidden Agenda
In July, Kelly’s relationship with Cones began to turn sour after the board approved a succession agreement that gave Cones the option to retire at age 66 or to stay on as General Manager.
When Kelly told his board that the WSC was going to, “double its operations when it purchased the LCRA 290 water line, and needed to gear up for it," Cones pointed out that there wasn’t sufficient information to make that decision. There have been no open discussions regarding the vague Kelly purchase plan.
Cones had developed a close working relationship with LCRA personnel when its water line was extended along 290 to supply WSC, and Cones knew that Kelly’s vision lacked any meaningful analysis. Cones encouraged the board to scale back Kelly’s requested financial contribution to the quickly formed Utility District Corporation coalition that was preparing a bid for portions of the LCRA water infrastructure.
For Kelly this was the last straw and Cones had to go, apparently even if Kelly had to fabricate a crisis.
“I investigated Cones” Kelly Said
Kelly set out to fire Cones by resurrecting the Steve Harris accusations already proven to be false. When that didn’t work, Kelly began his personal investigation as board president even though a Texas Attorney General Office review of two CPA audits of the WSC financials found nothing amiss.
After the fact, Kelly got two other board members to join him in authorizing an investigation that he had already commissioned, along with a process that required the investigator to present his findings to the corporation counsel, Haag, who in turn would report the findings to the full board. But that’s not what happened.
Kelly, a former FBI employee and retired Security Director for Temple-Inland, had already hired his private investigator friend, Craig Young, who also happens to be a friend and neighbor of board member Greg Perrin. Young is a member of the WSC.
Violating the board approved investigation procedure, Haag failed to report Young’s findings to the board, only to Kelly. That report indicated there was no evidence of a problem with Cones. Kelly did not share this report with the other board members.
Faced with an empty gun, Kelly created an easement issue that really isn’t an issue at all. Kelly got help from Dripping Springs City officials who it is believed gave Kelly a list of easements they had problems with when constructing the City sewer lines. The claim is that Cones failed to file some easements and thereby placed WSC at risk of trespass.
At the September 19, 2011, board meeting Kelly told the board about these new “transgressions” by Cones, but refused to show them any documentation. Kelly also announced that he had sent the, “Young investigation materials,” to the Hays County District Attorney for their review. The DA had not looked at the materials as of September 28.
Why did the other two appointed board members, Perrin and Foster, join with Kelly in voting to fire Cones without seeing any evidence of wrongdoing?
Kelly had previously suggested that board member Perrin become Cones deputy, and board member Marge Foster had previously asked Cones for the Office Manager job.
The Set Up and A Public Hanging
According to sources, Kelly had taken it upon himself to convene a private meeting on the morning September 6, 2011, preceding the regular September 12th WSC board meeting the night before. Kelly, using the Young investigation report to create a list of questions, confronted Cones at that meeting with allegations of wrong doing, despite them having been previously shown to be unfounded.
Others at that private Kelly meeting included Michael Grimes (CPA), Joel Wilkinson (long-time engineer for the WSC), and general counsel Phil Haag. Kelly asked Cones to leave the meeting while he conferred with the others. Grimes and Wilkerson both are reported to have told Kelly that, “Nothing is there.”
Firing Cones at the September 19 special WSC board meeting appeared to be an advertised public lynching and Cones’ adversaries were present to witness it. An eclectic group of participants included the previous three board members who had been forced to resign, the corporation member, Bruce Turbow, who was facing a WSC criminal complaint of theft and fraud, and Dripping Springs City officials who have long coveted the corporation for its $3 million cash reserves and only $250,000 of debt.
The five Dripping Springs City officials and employees in attendance were Bill Foulds (Mayor pro-tem), Spider Williams (city councilman), Ginger Faught (Deputy City Administrator), and Shot Glosson (City road inspector).
Kelly appears to have cooperated with the former ousted board president, Steve Harris who owes $850 for a newsletter he sent to members trying to save his job and using a WSC credit card for payment, Bruce Turbow, the WSC member facing a criminal complaint for stealing WSC letterhead and forging a fake press release by the board, and City officials who want Cones fired and out of the way.
Kelly wants the board to forgive the Harris $850, and to drop the criminal complaint against Turbow. On his own, Kelly instructed attorney Haag to prepare a settlement agreement after having received a letter from Turbow. It’s on the October 3, board meeting agenda.
Open Records Violation
On the morning of September 28, 2011, HaysCAN hand delivered an open records request to the WSC office. At 2:15pm that same day Ron Kelly called to say that our request for documents and correspondence was costing the WSC a lot of money and that we should come to him if there were any concerns about him or the WSC board. Kelly repeated that he, “had a lot on his plate and our open records request was interfering with his efforts and the WSC.”
Kelly’s telephone call was a clear and blatant violation of the Public Information Act (open records). This violation is being reported to the Texas Attorney General.
Conflict of Interest and Professional Ethics
Over the past two years, WSC costs associated with its attorney, Phil Haag, exceed $300,000. At one point Haag was taking and editing minutes of board meetings, preparing the employee handbook, is still writing the board meeting agenda, and we believe has participated in multiple Open Meetings Act violations by the WSC board.
20 comments:
The service area map is still there - it's accessible by the link on the bottom of the Home page
Sounds to me like this Kelly guy should have been running the Blackwater group in Iraq.
He is a hero to me. Anyone that is "going rogue" these days has my respect. If the people are too ignorant to see their scam, more power to them.
Rick Perry is my hero too.
Another excellent investigative story , Dr. O'Dell. We would love for you to come over to Wimberley and investigate the new alliances forged between Will Conley and long-time political critics.
See article "Water firm seeks new leader" in Oct. 3 Austin American-Statesman, page B1.
To Dem Gal,
Did you mean to say "between Will Conley and long-time political critics?" Or "between Will Conley and his political ALLIES?"
Please explain.
Mr. O'Dell;
As usual, your bias is showing. You did not attend the September 19th meeting, so you don't know that president Kelly has board authorization to engage PGMS as interim general manager.
And, as is so often the case with your reports, you listen to Doug Cones and don't do any fact-checking. For example, new board members Kelly, Perrin and Foster were appointed by Garnett and Walden following the resignation of Harris, Brewer and Wolf in March 2011.
Also, there is NO criminal action pending against Mr. Turbow. Although there is a civil case filed in March 2009 that the previous board chose to not pursue. The current board may elect to dismiss the case.
Further, although Cones may have been an employee of the corporation for 24-years, he certainly has not been manager or general manager that entire time.
I did attend the 9/19 meeting. Here are my notes:
Dripping Springs WSC
Special Board Meeting
September 19, 2011
Meeting called to order at 7:00. All directors present: Travis Garnett, Jim Walden, Ron Kelly*, Greg Perrin*, Marge Foster*. * New Director, Appointed March 2011
In 3-2 votes, the new directors were the 3; In 4-1 votes the new directors and Jim Walden were the 4.
President Kelly:
“On September 6, the corporation sent a letter to the general manager raising issues the board needs to address. Is the manager ready to answer the board’s questions?”
Martha Dickie of Almanza, Blackburn & Dickie LLP, attorney for general manager Doug Cone:
“I’ve reviewed the file and talked with Mr. Haag. I think the board knows the answers to those questions. This corporation has been operated successfully by the board and Mr. Cone for many years. There is $3 million in the bank and $260k in debt. I understand this board wants to move in a new direction. Mr. Cone has been the manager for 25 years, been responsive to the member/owners and has had no complaints. Mr. Cone has an existing contract..it is binding and there are provisions for fraud and misappropriation. Mr. Cone has complied with the Attorney General’s investigation. I’m a litigator. I’ve been doing this for 31 years. I’d like to try this lawsuit. It would be exceedingly unfortunate to remove Mr. Cone and all his good efforts and finish with a bad ending.”
Board enters Executive Session at 7:09 pm to discuss personnel matters.
Board exits Executive Session at 8:55 pm.
Motion: To decline the settlement offer procedure presented by Ms. Dickie and invite Ms. Dickie to resubmit any settlement proposals to Phil Haag. Motion Passed, 4 in favor, 1 against.
Motion: To terminate the general manger immediately for cause per the contract. Motion Passed, 3 in favor, 2 abstain.
Motion: To turn over to the Hays County Prosecutor’s Office the results of the Attorney General’s investigation. Motion Passed, 3 in favor, 2 abstain.
Motion: To authorize the president to engage a water supply management company to oversee daily operations until a new general manger can be engaged. Motion Passed 3 in favor, 2 abstain.
Motion: To authorize the treasurer to change the signatories on the bank accounts. Cone. Motion Passed, 4 in favor, 1 against.
Motion: To authorize the president to advertise for a new general manger. Motion Passed, 4 in favor, 1 against.
Motion: To authorize the president to form a committee to administer management functions. Motion Passed, 4 in favor, 1 against.
Motion: To adjourn Motion Passed, 5 in favor
Meeting adjourned at 9:04 pm.
After meeting, Martha Dickie commented: “It’s gonna be a bloodbath”
I asked this during the last big stink...DSWSC is pumping millions of gallons of ground water without a permit from the local ground water "conservation give-it-away" agency. Do they have a permit yet, for pete's sake??? If not, why not? If not, why are they allowed to pump without a permit? Will they be fined for pumping without a permit? And why are all these people so dysfunctional?
Dem Gal:
Tell it!
Kudos!
You really should get all of the facts before you publish opinions, which is all this is...and everyone has one.
Anon,
You have us all at a great disadvantage. We can only take your word, whoever you are, that these are your notes.
But OK, let’s take you at your anonymous word.
“And, as is so often the case with your reports, you listen to Doug Cones and don't do any fact-checking.” [You don’t know who my sources are but try to anonymously discredit me with a sweeping statement of your opinion.]
“For example, new board members Kelly, Perrin and Foster were appointed by Garnett and Walden following the resignation of Harris, Brewer and Wolf in March 2011.”[This is a non starter. I reported extensively leading up to the resignation of the Harris, Brewer and Wolf. Just read the RoundUp. Why makes you believe I wasn’t aware that Garnett and Walden (the only remaining board members) followed the By-laws and appointed Kelly, Perrin and Foster? I reported the new directors were appointed.]
“You did not attend the September 19th meeting, so you don't know that president Kelly has board authorization to engage PGMS as interim general manager.” [Are you suggesting that Kelly had not counted his votes to fire Cones before the special meeting he called? Polling members constitutes an open meetings violation. Also, consider examples in the report of Kelly exceeding his authority and seeking board “ratification and approval” after the fact. Go back and look at previous meeting agenda.]
“Also, there is NO criminal action pending against Mr. Turbow.” [I reported there was a criminal complaint pending against Turbow. Are you unaware that the previous board filed a criminal complaint against Turbow with the DA?]
“Also, there is a civil case filed in March 2009 that the previous board chose to not pursue.” [That just anther reason why the three board members were forced out of office.]
President Kelly:
“On September 6, the corporation sent a letter to the general manager raising issues the board needs to address. Is the manager ready to answer the board’s questions?” [That’s a false statement by Kelly. On Sept 6, Kelly convened a private meeting attended by Michael Grimes (CPA), Joel Wilkinson (the WSC Engineer), WSC counsel, Phil Haag and Doug Cones. The full board has yet to see the Kelly letter and questions. It’s in my report.]
“Motion: To decline the settlement offer procedure presented by Ms. Dickie and invite Ms. Dickie to resubmit any settlement proposals to Phil Haag. Motion Passed, 4 in favor, 1 against.
Motion: To terminate the general manger immediately for cause per the contract. Motion Passed, 3 in favor, 2 abstain.” [Why would the board fire Cones immediately following a motion to “invite Ms. Dickie to resubmit any settlement proposals to Phil Haag”, unless the three board members had already made up their minds to fire Cones?]
“Motion: To turn over to the Hays County Prosecutor’s Office the results of the Attorney General’s investigation.” [Kelly told me the AG investigation of WSC audit results and the DA action were entirely separate matters. Kelly told the Statesman reporter that, “The board has submitted some documents to the Hays County district attorney’s office for review.” Apparently, Kelly is trying to create an illusion of fire by creating smoke. Kelly made public or shared with his full board any evidence that Cones acted wrongly.]
“Motion: To authorize the president to engage a water supply management company to oversee daily operations until a new general manger can be engaged.
Motion: To authorize the president to form a committee to administer management functions.” [Why would you fire your GM before any provisions had been made to cover his absence? Moreover, when WSC responds to our open records request, we’ll see if Kelly acted again before receiving board approval.]
@ Water foul
DSWSC is pumping without a permit because ,,, they can. The HTGCD is the regulatory body that issues permits but can't force anyone to get one that doesn't want to without taking them to court. The HTGCD does not have the funds to sustain a law suit due to the lack of funding and the fact that those clowns over at the WVWA are presently suing them for granting a pumping permit to another entity that was likewise pumping without a permit. (Catch 22) The HTGCD is grossly underfunded because that is the way the local politicians and land owners want it.
To Water Foul,
I agree with you that DSWSC should have a pumping permit.
The DSWSC debacle is on the HTGCD agenda for Oct. 20. (See Agenda at
www.haysgroundwater.com.)
Also on the Agenda is appointing people to a Rules Committee. Jimmy Skipton IV (son of Board member Jimmy the Third) is nominated. Has he even finished high school? Is he old enough to vote? I have nothing against the kid. In fact he seems bright and polite. But a member of a Rules Committee?
Kelly made public or shared with his full board any evidence that Cones acted wrongly.
This should read:
Kelly has not made public or shared with his full board any evidence that Cones acted wrongly.
"Jimmy Skipton IV (son of Board member Jimmy the Third) is nominated."
Skipton IV is being groomed to run for office in Hays County...just like Patrick Rose was.
E. Wally and Linda Kinney plan for the future of their political party.
Dripping Springs simply drips with corruption.
Clearly this town is run by development interests.
And the school district is running out of money.
I'm glad I don't live there.
Just like all the other "nonprofits" out there...
They are not profitable for the members, but very profitable for the VENDORS (e.g., Haag)
Anonymous said:
"Also on the Agenda is appointing people to a Rules Committee. Jimmy Skipton IV (son of Board member Jimmy the Third) is nominated. Has he even finished high school? Is he old enough to vote? I have nothing against the kid. In fact he seems bright and polite. But a member of a Rules Committee?"
I suppose you would prefer the older "intellectuals" who created havoc with their version of the rules?
From a different angle: What qualifications do you think there should be for a participant on the Rules Committee? There is no requirement that one live in the area to be on such a committee. However, JS4 lives here, works here, and has attended most if not all of the meetings of the HTGCD for some time. He has also attended Commissioners Court meetings relating to groundwater and HTGCD funding. He is also falls into the class of well-mannered attendees which is more than can be said for other appointee-apparents.
JS4 probably has better qualifications than many of the other appointees and certainly has better manners. Above all I don't think he is so willing to fall for the "groupthink" mentality promulgated by various groups from Wimberley/Woodcreek.
Best investigative reporting in Hays County! Thanks Charles. And thanks Roundup. Don't let em get your goat. Hang tough.
Hey Anon #7,
Right on about the clowns at the WVWA. One must wonder whether WVWA is relying upon county funds to finance the litigation. Incredibly, WVWA is claiming that it is an "injured" party here somehow. WVWA's executive director David Baker didn't mention his interest in WVWA or abstain from voting when he tried to sink the applicant's permit request.
I predict WVWA and the circus of fools will lose a case they never had a legal right to "appeal" in the first place. Hopefully WVWA (and co-defendants) will be forced to pay HTGCD's legal expenses. Perhaps the county will re-consider its favored nonprofit contract with WVWA in view of the conduct of its executive director and the organization itself.
Charles
Do you have any update from the WSC meeting Monday?
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