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Monarch customers say the
utility is giving new meaning to …
The High Water Mark
By Michael V. Hannigan
Monitor Staff Writer
ATHENS – Water and sewer customers of Monarch Utilities,
Inc. filled the TVCC Student Union Building Ballroom Monday night to
protest a system-wide rate increase.
Protestors – who came mainly from around Lake Palestine and Cedar Creek
Lake, particularly the Pinnacle Club – spent nearly two-and-a-half hours
peppering Texas Commission on Environmental Quality (TCEQ) officials
with questions about state water rate law in general and fighting this
particular increase specifically.
The informational meeting was arranged by State Sen. Robert Nichols and
State Rep. Betty Brown on behalf of their constituents.
The rate increase became effective in September for Monarch’s nearly
22,500 customers in 24 counties. According to information distributed
Monday night by the TCEQ, the average Monarch residential customer using
7,000 to 10,000 gallons of water per month is now paying $44.37 for
water and $49.59 for sewer.
The sewer rate, however, is a stepped increase over three years. Next
year, that same customer will be paying $61.69 for sewer and $73.78 the
year after.
Protestors say the rates are ludicrous.
“This entire system is unfair to ratepayers and is causing a major
hardship on the elderly, disabled and young families just getting
started,” Orville R. Bevel, Jr., chairman of Texans Against Monarch’s
Excessive Rates (TAMER), wrote in a letter presented to the TCEQ.
“Additionally, the exorbitant rates will drive property values down in
subdivisions that are adjacent to lower water and sewer costs in other
subdivisions. We can show you many subdivisions that are much lower in
cost, have better maintenance and provide excellent quality water. Since
Monarch (took over) … the cost for water has more than tripled for the
average user in less than five years.”
The good news for protestors is that enough people have complained that
the rate case will be referred to the State Office of Administrative
Hearings (SOAH).
The bad news is customers will continue to pay the rate increase until
further notice.
The Process
TCEQ attorney Brian MacLeod, the main spokesman for the agency Monday
night, explained the administrative hearing process held in Austin:
1. SOAH referral
2. Preliminary hearing
3. Discovery
4. Mediation
5. Evidentiary hearing
6. Commissioners decide
MacLeod said enough protests have been filed – more than 3,000 as of
Monday night – to ensure the SOAH referral, but warned the entire
process could take 18 to 24 months.
For now, the new rate stays in place; something Monarch customers on
hand Monday night were vocally upset about.
MacLeod had a simple answer for them: It is state law. According to
current rules, water utilities can charge new rates 60 days after
notification.
If after the administrative process the TCEQ sets lower rates, the water
utility will have to issue refunds with interest, unless customers make
the unlikely choice of agreeing to waive the refund.
The TCEQ has the option of setting interim rates, MacLeod said, but
added the agency usually doesn’t unless the utility’s application is
incomplete. In this case, despite repeated reports that Monarch did not
notify everyone in the system, TCEQ has decided to go forward.
Protestors can ask the SOAH judge to set interim rates during the
preliminary hearing, which is the next step in the process, he said.
Nobody knew when the preliminary hearing would be held, but many guessed
after the first of the year.
That would work just fine for TAMER, Bevel said after the meeting.
The grassroots group intends to charter buses to pack the preliminary
hearing with protestors. That will be harder to do before the holidays,
he said.
He should know.
In 2000, Bevel and many others involved in TAMER fought a water rate
increase. He knows the fight may be long and possibly expensive.
“Donations are how we are operating,” he said.
The Issue
While MacLeod explained the process, TCEQ engineering specialist Brian
Dickey explained what will be looked at by the agency.
“Rates are based on 12 months worth of operating costs,” Dickey said.
According to Dickey, the TCEQ will audit Monarch’s books and physical
assets to determine how much it actually costs the utility to provide
service to its customers. The TCEQ will be using Monarch’s 2006 figures,
he said.
If the audit finds Monarch inflated any of its costs or figures, the
TCEQ will make a correction.
Those figures will determine the rate, that and about a 12 percent
profit margin, MacLeod said, a figure not set in stone but rather a
guideline.
Several of the protestors said they wished they could get into a
business with those guidelines.
Many of the questions directed at Dickey dealt with specific questions
regarding Monarch, such as:
• Why has Monarch’s payroll increased so much while service has
decreased?
• Why is the rate spread across the entire system penalizing some areas
for the problems of others?
• Why can Monarch pass its mistakes on to the customers?
• What about bonds Monarch is trying to secure (almost $60 million
worth, according to TAMER)?
• Why are Monarch’s fees so much higher than other utilities?
• Why did the TCEQ go forward with Monarch’s application when nearly 900
customers signed protest petitions saying they were not notified of the
increase?
• Why did Monarch not notify several subdivisions that they were
combining some of the utility’s systems?
Dickey admitted not having the answers to most of their questions yet,
because the TCEQ administrative process is just getting underway.
Comparing Monarch’s rates to other water utilities probably wasn’t going
to be relevant, he said.
“Because, the rate (according to state law) is going to be based on what
this particular utility pays in costs,” he said.
E.H. “Bud” Henry, the former general manager of the East Cedar Creek
Fresh Water Supply District, told Dickey the comparisons are relevant.
“Here is the reality,” he said. “The difference is staggering.”
One protestor who did not give his name said his research through the
Texas Municipal League website showed Monarch’s rates were more than 100
percent higher than the state average for comparable areas.
Pointing to his experience in the water business on Cedar Creek Lake,
Henry agreed.
One man in attendance who could have shed light on several of the
questions was Monarch Vice President John McClellan. He declined to
speak to the crowd, however.
After the meeting McClellan said, “Anything we say here is admissible in
court, so basically we don’t do that.
“This is what you experience in any of these rate hearings. Cost is a
big concern,” McClellan said.
While not addressing the specifics of the rate case, McClellan did say,
“I always look at customer service, that’s always an issue. That’s
always a problem. We try to address that the best we can.
“Monarch was a big challenge when Southwest Water bought them just
because of the numbers and the counties and the number of people,” he
added. “So it’s been a big challenge.”
The Politics
While Monarch customers had the chance to vent, the truth is state law
mandates the TCEQ’s steps. There isn’t a lot of wiggle room for somebody
like MacLeod or Dickey to take independent action.
In opening the meeting, State Sen. Robert Nichols and State Rep. Betty
Brown said changes in the law are definitely needed – particularly in
regard to customers paying higher rates before a TCEQ ruling.
“We have already put in a request for an interim study between now and
the next (legislative) session on the issue of not charging the new rate
until after the hearing,” Nichols said.
“I’m hoping that the lieutenant governor will have that as an issue
flagged, because we’re sure going to file legislation regardless,” he
said.
Nichols must have known what was coming, because the first question from
the audience was from Steve Garwacki of the Pinnacle Club, but the same
question was on the lips of just about everyone present.
“Why is there not legislation proposed and enacted to preclude us from
having to pay before the rate increase is approved?” he asked.
“You’ve (Nichols) addressed that in your comments, but I represent the
Pinnacle Club, and we have a whole table and a half here so there are a
lot of folks who ask the same question.
“One of the key things we would ask be done in Austin this year, with
your help, is that be addressed,” he added. “So that instead of us
having to pay these rates for a minimum of 18 months or longer, the
utility companies have to prove – prior to us paying that – they need
those rates.”
Nichols said he had filed three pieces of legislation during the last
session – his first in the Legislature – regarding the way water
utilities operate in the state.
“I was amazed how quickly bills like that (died) in committee,” he said.
Both Brown and Nichols vowed to support legislation to change the way
water rate cases are currently handled.
Protesters fill county
courtroom
‘Don’t move county services to Loop 7’
By Pearl Cantrell
Monitor Staff Writer
ATHENS–Nearly every seat was filled at the Henderson County
Commissioners meeting Tuesday.
Five Athens citizens signed up to address the court on the action item
relating to the purchase of 44.35 acres on the N.E. Loop 7 due to close
Nov. 30.
The room was packed with those against moving county government to a
location outside the courthouse square.
Athens mayor Randy Daniels said it was the city council’s job to protect
its citizens from harm, including economic harm.
“A marker was recently dedicated marking this courthouse as a building
of historical significance. The words ‘heart and soul of the community’
were used. But you are threatening to make those words meaningless,”
Daniels said.
He asked for the council and the business association to be included in
proposing solutions to the commissioners on the county’s growth needs.
Daniels presented a resolution, recently passed by the Athens City
Council, outlining the historical and economic importance it attaches to
the business conducted in the county courthouse and urging the
commissioners not to move significant government functions to a remote
location.
Anne Perryman said other counties which have made similar moves have
regretted it, because of the economic impact such a move has caused.
“There is plenty of real estate on the square that can be used to grow
from this centerpiece,” she plead.
She exhibited a map of real estate around the square with suggestions on
how the county might grow into nearby buildings and properties.
Mary Ann Perryman, past member of the Texas Historical Commission (THC)
read a letter from Stanley Graves, director of the commission’s
courthouse preservation program.
“It is the responsibility of counties under Section 442.008 of the Texas
Government Code to preserve historic county courthouses as landmarks for
the use and enjoyment of future generations of Texans. The THC is
available to assist Henderson County during the crucial planning stages
of government expansion and help the county meet its growing needs while
continuing to preserve its historic courthouse as a focal point of
Henderson County,” it read.
Prominent Athens attorney Fred Head followed with information of a $6
million grant available from THC for courthouse rehabilitation.
“We are at the right time to get our hook in the water for the next
grant,” he said, adding a proverb: “the only debt we owe to the past is
to leave the future indebted to us.”
Judge David Holstein concluded the citizens comments by saying the
county’s growth issues have been something commissioners have wrestled
with before he was elected. And nothing this court has done has been
done in secret, he said.
Precinct 1 Commissioner Joe Hall said the commissioners have looked at
every option, including the Stowe Building, old hospital site and the
former Safeway grocery site.
“We’ve been looking at this for seven years. This is a beautiful
historic building. We’re not proposing leaving it empty. But something
has to be done,” he said.
Because of its historic designation, nothing can be changed on the
outside or the inside. “We can’t even widen a doorway entering the
bathroom to be ADA compliant. I’ve heard a lot of options – none of them
viable ones,” he said.
Precinct 2 Commissioner Wade McKinney said the property just inside Loop
7 gives the county options it has never had before.
“In 2002, we strived hard for restoration but that limits our options
for office space.”
McKinney was emphatic that issuing certificates of obligation to
construct county office buildings was not an option. “The voice of the
people were heard on that subject,” he said.
Precinct 3 Commissioner Ronny Lawrence said the surrounding buildings on
the square are nothing but “old and rundown” with less electricity and
poorer security.
“Nobody here has more ties to this building than I do. My
great-great-grandfather was commissioner when it was decided to build
this place in 1910. I have no intention of shutting this courthouse
down, but as we create more courts, there’s not enough room here,”
Lawrence said.
Precinct 4 Commissioner Jerry West disagreed.
“I encourage the court to back off from this purchase. I think there are
other things we could pursue,” West said.
He pointed out the court has never appointed a committee to examine the
county’s needs and make recommendation as it has for the jail expansion
and the recruitment of ETMC as the county’s hospital.
He proposed moving the tax and financial offices along with voter
registration to the old hospital site, where there’s plenty of parking
and use the old tax office for court rooms. “There are others (options)
still out there. If this group doesn’t influence this court, I don’t
know what will,” he said.
West made a motion to terminate the land purchase. While waiting for a
second, someone from the audience shouted, “You cowards.” The motion
failed.
Hall moved action be delayed until Tuesday, Nov. 27, and in the meantime
a workshop be held with Athens City Council, business groups and
historical society to review “other options.” Lawrence seconded the
motion. West said he doubted anything significant could be accomplished
in two weeks.
Holstein reviewed the land purchase process before the vote was taken.
In September, the county entered into an agreement to exercise its
option to buy. It conducted due diligence in the interim and the sale
closes on Nov. 30. Hall and McKinney supported the motion and it passed.
In other business, the commissioners:
• set a public hearing for 9:30 a.m. Tuesday, Dec. 4, on taxation of
property in transit as afforded by the 80th Legislature. The county has
until Jan. 1 to enact a tax or lose the option to do so ever after, tax
collector Milburn Chaney explained.
• entered into an informal interlocal agreement with the City of Athens
to bore under Prairieville Street from the courthouse to the Ginger
Murchison Park for an additional water line at a cost of $5,641. The
extra line and meter is necessary for non-drinking purposes such as
cooling and watering the landscape. The existing two-inch line doesn’t
carry enough capacity to allow the top floor water pressure if watering
or cooling tower is drawing on the line. Also, the separate meter will
not have sewer service attached to it, so the savings should be
significant, Holstein said.
• renewed a software license with IBM via Tyler Technologies for an
annual amount of $956.
• paid bills totaling $256,521.08, withholding a bond refund to Clean
Air, the asbestos abatement firm, until a final walk-through with
consultants ERI to approve the work has been completed.
Mabank students place planks
for Habitat House
Monitor Photo/Pearl Cantrell
 Mabank
High School students Cameron Tucker, Erica Umana, Lauren Hamilton and
Anthony Hendrix get busy signing the high school board for inclusion in
the foundation of the next Mabank Habitat House. All campuses were
represented in the ceremony Monday. “They (MISD) laid the foundation for
this house through their Spirit Week fund-raising. It’s only right they
should place some of the first boards in the foundation of this house,”
Cedar Creek Lake Habitat for Humanity director Eston Williams told The
Monitor.
Monitor Photo/Pearl Cantrell
Lakeview Elementary student Gabi Corder applies a pneumatic nail gun to
their school board with the assistance of high school shop teacher Jim
Whites. Also representing Lakeview are (from left) teachers Janelle
Bowland, Melissa Sullivan and Dale Mason and students Ian Boothe and
Olivia Sullivan.
Monitor Photo/Pearl Cantrell
Mabank Middle School assistant principal Darren Jolly joins in the
signing of boards becoming part of the foundation for the Cedar Creek
Habitat for Humanity house. With him are middle schoolers Allie Sandlin
(left), Tarynn Pool, Landon Marshall, Jarred Odom, Hunter Carrico and
Cameron Tucker. Teachers Charlotte Purl and Rance Thorne look on from
behind.
Monitor Photo/Pearl Cantrell
Central Elementary school students Grant Caphart (left) Jill Odom, Kade
Norman, Jace Caphart and Josh Odom carry their plank bearing the names
of students from their school to be fastened into the foundation of the
house that Mabank ISD built.
 Monitor
Photo/Pearl Cantrell
Southside Elementary school students Justin McWhorterson (left), Allissa
McCoy, Zane Koskelin and Riley Lenz are introduced to the pneumatic nail
gun while Tonya Chapman, Melissa Smith and principal James Pate look on.
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