Print 🖨

The Committee met to hold an additional organizational meeting with invited testimony focusing on water districts and MUDs.
 
Stacy Bergendahl, Texas Legislative Council

  • Districts are not forced to abide by the set MUD model – provisions can be added or adjusted to tailor MUD  to individual needs
  • Rep. Faircloth recognized within the model there is an eminent domain clause
    • Not directly stated in the draft – district created as a MUD by default operates under the water code in chapter 49 and 54
  • Rep. Zedler asked if every MUD had the same eminent domain power
    • No, there is a difference based on each individual MUD depending on whether they want to add, lessen or get rid of imminent power altogether
  • Chairman Miller followed up Rep. Zedler’s question by noting it does not matter if the legislature or TCEQ creates the MUD – powers are the same based on the water code
    • Yes, that is correct
  • Chairman Miller asked if imminent domain in statute is not particularly only in district (e.g. lots are sold and property sold off)
    • General power is inside and outside of the district – exact ruling needs to be further analyzed
  • Rep. Stickland recognized voters in a MUD must vote on new taxes, but eminent domain cases do not necessarily have to go through voters
    • Yes, that is correct – there is no specific election needed
  • Rep. Stickland questioned if there has been a problem with property being eminent domain outside of the district – have there been complaints of these rulings
    • No direct experience with complaints

 
Michael Turco, Harris Galveston Subsidence District

  • Revenue comes through the issuing of permits – nearly 8,000 active groundwater permits between Fort Bend and Harris Galveston
  • Groundwater is regulated as a measure of total water demand – Galveston County is currently using 10% of groundwater and 90% of alternative water supplies from the Brazos and Trinity river
  • A majority of regional water providers are also permittees – increased collaboration between those regulated and the regulator
  • Rep. Faircloth remembered seeing a map where subsidence was monitored as far away as Montgomery county and asked if there has been a trend of subsidence in the northern part of district
    • Areas I and II have full conversion and minimal subsidence; Area III going through conversion and subsidence continues today (i.e. Northern and Western parts of Texas)
  • Rep. Faircloth asked if groundwater credits were transferrable
    • Yes, in some instances they are able to be transferred or sold – not part of transaction
  • Chairman Miller asked who makes the appointments for the board
    • They are appointed by elected officials (e.g. Houston appoints six members) and originally set up in statute – serve two year terms and can be renewed as many times as desired 

Fred Aus, Texas Rural Water Association

  • Approximately 750 member utility systems that provide water services to more than 2.5 million Texans
  • 2/3 members are water or sewer supply corporations, small MUDs and SUDs – majority of systems serve up to 1,500 connections on average
  • SUDs are public entities that do not have taxing authority

 
Roland Ruiz, Edwards Aquifer Authority

  • Adopted local rules voted on by a board to implement directives of the EAA enabling act
  • Revenue generated from user fees paid by holders of withdrawal permits issued by EAA
  • Habitat conservation plan has been approved by US Fishing and Wildlife services
  • Chairman Miller noted EAA’s sole purpose for existence is to manager the Edwards Aquifer and create educational and conservation programs accordingly – asked about the federal law suit
    • Defendants in a law suit filed by the League of United Latin American Systems – board governance authority is at question
    • 15 elected members and 2 appointed members sit on the EAA board – questionable compliance with the one person, one vote provision of the constitution
      • Claiming EAA is exception as a special purpose district 

Robert Mace, TWDB

  • 140,000 actual reuse of water in the state through indirect or direct purposes
  • Texas suffering a statewide drought since 2011 – West Texas water supply at greatest risk
    • Reservoirs statewide are about 66% full but normally expected to be 84% full
    • Increased by 1% since last year – lowest numbers since 1990
  • Rep. Faircloth asked if loans available for infrastructure are available through TWDB or area councils
    • Available through direct access of the TWDB board
    • SWIFT money has to be approved through the regional planning group 

Kevin Kluge, TWDB

  • Received fewer water impact statements from LBB during recent sessions – last session received four requests compared to 40 requests in 2011
  • Rep. Stickland asked if new development growth of a population area is taken into consideration
    • No, projected numbers are based on surrounding cities – districts are created in areas with few people to begin with

Tammy Benter, Public Utility Commission

  • Responsible for regulation of retail public utility rates and services
  • Appellate jurisdiction over districts, cities, water supply corporations and counties –  original jurisdiction over investor-owned utility rates
  • PUC maintains mapping of CCN service areas and coordinates with TCEQ when rate changes requested
  • Rep. Stickland brought up concerns from last session regarding the PUC’s expanded power of turning off someone’s utilities
  • PUC has the authority to grant CCNs – stated in Chapter 13 of the water code
  • Chairman Miller recognized there have been issues with people who wanted to get out of one CCN and go to another CCN or create their own
    • Two processes allow for expedited release of a CCN service area – different requirements:
    • Own 25 acres or more partially in one of these CCN areas and request for removal from CCN service area; compensation required
    • Own 50 acres or more and have an alternative service provider to provide a more reasonable rate; compensation required

Linda Brookins, TCEQ

  • 122 districts created by legislature, 33 districts created by TCEQ, 2 created by counties (2011-2014)
  • TCEQ holds a confirmation election once district is up for approval to elect permanent directors and to authorize debt obligations and maintenance taxes
  • TCEQ ruling promotes regionalization among water suppliers and wastewater

Justin Taack, TCEQ

  • Rep. Stickland asked if another entity can ask TCEQ to go and create another district for them
    • Rules regarding creation of districts – a group of landowners can sign a petition to create a district but typically one landowner or develop submits a petition on his own
  • Rep. Stickland asked if a specific water district had interest in creating another water district – essentially anyone can apply if they meet the statutory provisions
    • Not aware of a district creating another district
  • Rep. Stickland asked if appointed board members have any restrictions or term limits
    • Temporary directors are appointed at the time of a water district creation and then directors are confirmed as permanent after voting and logistics enacted
    • TCEQ can appoint directors to fill vacancies based on need for the rest of a term

Leslie Brock, Office of the Attorney General

  • Review for compliance with state law all public securities issued by governmental entities as well as non-profit corporations created on their behalf; they are required to review these securities
    • Also looks at the statutory authority to issue debt; you have to have expressed statutory authority to be able to issue debt
  • If there is a revenue pledge, they have to make sure it’s properly pledged
    • They have to make sure that the authority complies with all the state and constitutional law requirements
  • Noted that this is a strict legal review; it does not address financial advisability
  • They will issue a legal opinion if all the requirements are met
  • When they have issued their opinion, the bond is then submitted to the comptroller who then registers the bond
  • When the bond is then delivered and exchanged for the purchased price, the public security is then incontestable in court

Rob Latsha, Bond Review Board

  • Board has separated the local government debt into 7 categories
  • Local debt has grown by approximately 72% over the past 10 years – or $205 billion
  • As a share, water districts and other special districts account for about 22% of the debt
  • For other special districts, the majority of growth has occurred in the transit and toll way authorities

Bond Review Board

  • Chairman Miller noted citizens must have the right to vote on tax bills themselves
  • Transit and toll way authorities have experienced growth in the OSDs
  • Rep. Stickland asked what the best and worst ratings of the state are for ISDs, community colleges and 4-year universities
    • ISDs have access to the permit school fund which provides a AAA rating – more information of these statistics will be provided 
  • Rep. Stickland asked if there have been any defaults in the municipal market
    • Conduits are situations where there are pass-through (e.g. TXU and housing finance corporations) – more information to come

Hayley Wynn, State Comptroller Office

  • Debt-at-a-glance was created in 2013 as part of a local transparency initiative – originally identified large cities within the state but now include ISDs and smaller cities within the state

 
Elizabeth Barrett, State Comptroller’s Office

  • MUDs and water district debt information will soon be released once information received by TCEQ
  • Plans for the future to include more special purpose districts, including health and hospital districts

 
Chairman Miller noted in the next week or two the committee will start hearing bills.