The fight for ownership of Hidalgo County Water Improvement District No. 3’s water rights moved to Austin on Monday, and the push to dissolve the district and hand its responsibilities to the city of McAllen has a new backer in the legislature.
State Sen. Juan “Chuy” Hinojosa presented arguments on behalf of Senate Bill 2185 on Monday before the Texas Senate Committee on Local Government, which has the ability to move his bill seeking to dissolve the district a step closer to becoming a law.
The hearing drew testimony from seven people: a McAllen official who supported the measure, one who was neutral and there to represent the Texas Commission on Environmental Quality, and five who opposed the bill, including irrigation district officials from Cameron County and a farmer who said he was being robbed of his water rights.
Hinojosa introduced the bill and made the same arguments at the Capitol he’s been making for years: the district has outlived its purpose, water rates for McAllen residents are higher as a result, the general manager/board president is abusing its power, and it’s an unnecessary level of government that is costing taxpayers unnecessary expenses.
“And chairman (Paul) Bettencourt, adding insult to injury, the district uses city of McAllen taxpayers’ money to pay for lobbyists to lobby against the interests of the taxpayers of McAllen to the tune of over $900,000 over the years,” he told the committee chairman.
Hinojosa also argued the smallest water district in South Texas interfered with elections and “flouts the Public Information Act (to) hide these activities from public scrutiny.”
He requested information under his legislative authority March 24 and has yet to receive it even though it was due last week, he said.
“The water district has a history of hindering the election process by excluding properties, potential new board members and by redrawing the boundaries every election to exclude voters that don’t support it,” the state senator said. “We don’t even know when they had the last election or who was on the ballot. And for us, this is a real problem and this water district is mismanaged.”
Once Hinojosa finished his introduction, Bettencourt opened the hearing to the public and McAllen Public Utility General Manager Mark Vega took the podium first.
“Unfortunately, many ratepayers and residents are adversely affected by the outdated framework of water rights in the Rio Grande Valley,” he said, noting that the once agricultural area is now one of the fastest growing regions in the country.
McAllen is forced to pay for raw water from the district at a “staggering rate that is 80% more expensive than the city’s other water sources,” he told the committee. “On top of the exorbitant rate the district charges the McAllen Public Utility for its raw, untreated water, the district also charges excessive crossing fees that significantly hinder economic growth and development of McAllen’s urban core.”
Each time a new development or improvement crosses the district’s lines, the district charges a crossing fee of $500 per inch of diameter of the crossing pipe, plus an application fee of $750, he said.
“For example, a 24-inch storm sewer line incurs a fee of $12,750,” Vega said. “This is just one example. Every pipe that crosses a District 3 pipe or easement is subject to these fees, whether installed by McAllen Public Utilities, the city of McAllen, a private developer or even other public utilities, such as the gas companies or telecommunications providers.
“The net result is development is forced to pay needless fees and think twice about how and where they are able and willing to locate.”
In short, McAllen PUB stands “ready and able” to provide water throughout the district’s territory, he said, noting that the PUB is frequently audited by the Texas Water Development Board and rating agencies to earn and maintain its AA+ bond rating.
Vega also noted his board is elected by the public.
“Unlike the district, the McAllen Public Utility Board of Trustees answers directly to the residents they serve, making accountability a paramount priority,” he said.
After Vega’s three-minute testimony, a representative from TCEQ made himself available to the committee to answer questions about the bill’s impact.
“Is there any issue with the dissolution of this, of a water district in the middle of the city,” Bettencourt asked him.
“No sir,” the TCEQ representative replied. “It’s a water improvement district as well.”
Eddie Zamora, an Edinburg resident and a political supporter of the district’s general manager/board president Othal Brand Jr., spoke next in opposition of the bill.
Zamora argued the district protected the city’s water supply during Hurricane Dolly because of Brand’s foresight.
“(He) saw that the new pump station was at a height below the levee. With board approval, the new pump station was elevated to a height above the levee, such that a rising river would flood over the levee without reaching his pumps,” he said. “Fortunately, for the citizens of McAllen, the first attempted takeover of this water district failed in 2007. Because if it had passed and been signed into law, McAllen would have had to spend millions of dollars trucking in bottled water because Water District 3 would have had to pull their pumps out to prevent river breaching, just like the other two water districts (did) during Hurricane Dolly in 2008.”
He also noted the district was able to provide water during the February freeze because it installed natural gas backup generators that allowed it to continue operating despite the electrical grid failure.
But perhaps his most notable argument was that Brand, who is running for McAllen mayor, doesn’t get paid for his work with the district.
“In 17 years as general manager of Hidalgo County Water Improvement District No. 3, Mr. Othal Brand Jr. has never taken a salary, thereby saving the citizens of McAllen and the water district more than $1.4 million,” he said.
Tito Nieto, general manager for Cameron County Irrigation District No. 6 in Los Fresnos, also opposed the bill. Nieto said he managed Brand’s district from 2004-2005 and had two former McAllen mayors on the board to protect the city’s interests.
“They have over 3,000 acres that they still serve and they continue to improve their infrastructure to provide a safe and effective water supply to all its customers,” Nieto said. “As a member of the General Managers Association of the Valley, we’re formally against this bill. It sets a precedent. This constitutes a taking of water rights that have been perfected by District No. 3.”
Tim McDaniel, a farmer, testified he was worried about representation.
“If this bill goes through, I farm outside the city, which means I have no representation on their board, because I don’t have anything in the city,” he said. “So as far as that goes, this is not a good point for me.”
Alvaro Martinez, general manager of the La Feria Irrigation District, called the bill “pointless.”
“Nowhere has it said that the irrigation district has failed the city of McAllen or its farmers,” he said. “Also, there is a water right that has been perfected. This is something that they own. These farmers have invested time and effort into this district. For someone to come and say, ‘I’ll take it away from you,’ it’s rightly unfair. If I would be that one farmer, you would be robbing me from this right that I’ve invested in.”
Lance Neuhaus, a producer and user in the area, agreed with Martinez.
“If these water rights are taken from the district, it’s just like taking a piece of property. It’s an asset. I’m against the bill,” he said. “I don’t see a real purpose of doing it other than just a power takeover.”
And though the farmer was the last public speaker, Hinojosa asked to give a closing statement.
“Chairman, I just want to close by saying the majority of the revenue, or over 90% of the revenue, is paid by taxpayers of the city of McAllen. This water district properly belongs to the taxpayers — not any particular person or farmer,” he said.
The bill is pending a vote by the committee, but even if members don’t pass it, there’s a chance it may have life in the House. Texas Rep. Terry Canales, D-Edinburg, last week filed H.B. 4620, which mirrors Hinojosa’s bill.
“It is common practice that members from opposite chambers carry each other’s bills as legislative courtesy,’ Canales said in a statement to The Monitor. “This is one of Senator Hinojosa’s priorities, and therefore it is one of mine.”