Sunday, June 25, 2006
New ECC board stymied
Board splits in GBC takeover discussion
By Pearl Cantrell
Monitor Staff Writer
GUN BARREL CITY–The new East Cedar Creek Fresh Water Supply District board was evenly split over Gun Barrel City’s proposal to take over the district and set up its own water department.
However, board members reached a consensus during Wednesday’s meeting, agreeing to schedule a work session with the interested parties to examine issues and field ideas involved in such a project.
Newly elected ECC board members opposed a motion to retain special legal counsel Mark Zeppa, but also opposed a motion to formally voice opposition to actions being taken by Gun Barrel City.
Two holdover members voted for the two motions, with board president David Burch casting a third vote. Jack Stegall was not present, reportedly due to illness.
The 3-3 vote meant no action was taken by the board on these two issues.
May 23, the Gun Barrel City Council approved five measures empowering the city manager to initiate procedures and make application to the Texas Commission on Environmental Quality for taking over water and wastewater services for the city.
June 13, the city formally established a water and wastewater department, which to date is unmanned and unbudgeted.
These actions prompted the response at the ECC board’s meeting.
A standing-room-only crowd overflowed into the hallway at the district’s Hammer Road office.
Zeppa was described as a “scorch and burn” litigator by new director Ken Landers, and as a “very competent expert” by board secretary Jim Boyles, who has worked with Zeppa in the past at another water utility.
“Is it your intention to initiate litigation?” Boyles asked general manager Bill Goheen, who strongly recommended the retention of Zeppa.
“Absolutely not,” Goheen answered. “However, it would be negligent to wait and not take some action to prepare a plan or have a consultant on board that could give timely answers.”
“Once you get attorneys involved, it’s too late to talk,” Landers countered.
Board treasurer Carol Meyer pointed out the board has employed experts in the past without jumping to the conclusion that litigation was the goal.
“We’re better off getting a best and worst case scenario, so we’ll know the facts,” Landers said. “We need a feasibility study, not expose ourselves to the risk of litigation.”
New director Karen Jentzen said nothing has been presented to her to suggest a Gun Barrel City takeover would be a bad thing for ratepayers, “so why would I oppose it?”
“There is no evidence that a takeover would be positive for rate payers,” Meyer countered.
“As a steward of the district’s and your assets, it is my job to prevent any takeover of the district’s and your assets,” Boyles said.
At least two directors found Boyles’ comments highly offensive.
Not voting for the motion doesn’t mean “we’re giving assets away,” Landers answered.
According to the latest audit completed for years 2004-05 by accounting firm Johnson and Johnson, the district’s gross assets amount to nearly $30 million, including $27.5 million in property, plant and equipment.
“I will not take actions on issues I am uneducated on,” new director Mike Grant said, adding he had many questions, but the agenda did not afford him an opportunity to ask them at this time.
Meyer voted to oppose GBC until such time “facts and figures could be presented that showed no risk associated with it.”
During public comments, representatives from outlaying property owners associations, as well as other cities within the district, addressed the board.
The majority were opposed to the takeover and pointed out both Enchanted Oaks and Payne Springs city councils had approved formal resolutions opposing the GBC takeover.
All speakers recommended the board retain special legal counsel to deal with these issues, and to host a forum where Gun Barrel City’s complaints can be examined and solutions proposed.
GBC Economic Development Corporation board president Dennis R. Wood explained the takeover was prompted in part by the needfor the installation of an aerobic sewer system for a development project on Main Street.
“I’d say it’s broken,” Wood said, referring to comments made by those outside GBC who say, “if it ain’t broke, don’t fix it.”
Wood also pointed out other developments (Lowe’s, Wal-Mart) in the city were not asked to pay any impact fee, while the Landers’ project has been asked for a $200,000 contribution.
“When you consider that the project will likely pay $70,000 a year for sewer service, that amounts to double billing,” he said.
The GBC EDC has invested $1 million in the project, so the citizens of Gun Barrel have a high stake in this matter, Wood said.
“If the entire project were ready to go on-line today, (something projected to occur within five years) your existing (wastewater) capacity would be able to handle it, without a single upgrade,” Wood charged.
“The TCEQ obligates you to provide for growth in this community,” he said. “We’re also talking about quality of life issues here that affects everyone who lives around the lake – issues related to jobs, and economics.”
Enchanted Oaks Mayor Don Warner told the board that after reviewing the facts, Enchanted Oaks is satisfied with the district’s current and past performance, and has gone on record opposing GBC’s actions.
Warner added he feels much of the animosity around these issues comes from a clash of personalities in the past, and that an open meeting should be called.
“Basically, there are just two issues to look at – the immediate needs of the Landers Development, and whether $200,000 is a fair impact fee, and the long-term solutions for accommodating growth in the area, Warner outlined.
“We’re happy to do that, Burch said. “GBC is the hostile party here.”
“If GBC can be satisfied, it will be great for all involved,” Warner answered.
Boyles agreed that the time is right to hold open discussions.
“I want it to be fair to the rate payers and fair to the developers,” Boyles said. “It may be as simple as ‘user pays’.”
“Communication is key,” Timber Bay POA representative Carol Halliday interjected. “We’ve heard nothing. And we’re being asked: Are we going to have water next week? Are we being sold off? We’re very, very concerned.”
Payne Springs Mayor Michael McDonald complemented Gun Barrel City for calling a meeting early in the week with the parties involved and stressed that in litigation, nobody wins.
“Hurt feelings and anxieties can be addressed as a group before going down the road to litigation. But do get legal advice. The best litigators all say ‘don’t litigate’,” he said.
Gun Barrel City councilman Marty Goss also referred to a previous meeting of some of the parties involved.
“It’s possible to head this off,” Goss said. “Stipulate all board members attend any future (joint) meetings, so we can know one another’s mind, good or bad.”
He also said the actions taken by GBC were suggested to them by West Cedar Creek Municipal Utility District as a solution to supplying water to the islands along the causeway bridge towards Seven Points.
“You (the district) look good on paper, but do you look good in the town? The answer is ‘No.’ Gun Barrel City has the impression of poor management, but now you have a new board,” Goss said.
In a related item, the board directed Landers Development representative Curtis Webster to meet with the financial committee and general manager to renegotiate the $200,000 in light of Landers’ offer of $50,000, and additional computations not before considered that may lower that figure.
The meeting will also deliver a set expense value for extending the district’s waste water CCN (certificate of convenience and necessity) to include Landers’ property.
These were the two of eight conditions outlined in the board’s previous letter to the developer under the direction of then-president Giles Farmer.
“We agree with six of the eight conditions (in the letter),” Webster said.
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