Is the PSB Corrupt? |
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Is the PSB Corrupt?
The El Paso Water Utilities Public Service Board (PSB) told us that El Paso would be out of water by the year 2030? They raised prices by 93% so that we pay more money for less water. They have acquired new assets worth $757 Million13 in the past ten years but water production has gone down by 6%.14
Citizens assumed that price increases would be used to bring in more water but the PSB spent $200 Million19 to subsidize new housing subdivisions and they plan to spend another $226 million for that purpose in the next ten years. Then they will have to spend $630 Million18 to import water for those subdivisions.
Current PSB management has saddled water customers with $450 Million of debt13 and the task of raising $630 Million to import water. Future PSB management must raise prices to recover $970 Million or the city will face a water shortage.12
Here is an example of how current PSB management takes money and water from El Paso citizens to support rich developers. In 2003, the PSB agreed to provide water and sewer services to the Hunt Communities' Paseo Del Este Municipal Utility District.1 Paseo Del Este will build 20,000 homes on 5,600 acres.2 It is located outside of the El Paso City limits. All costs to produce the water and deliver it to Paseo Del Este are paid by residents inside the El Paso City limits.
Paseo Del Este residents are slowly reimbursing the costs but they pay less for their water than El Paso residents.10 El Paso residents will never recover the water and may never recover the money that they have been forced to invest in Paseo Del Este. El Paso water customers will absorb the loss if Paseo Del Este fails and Hunt Communities will receive the reward if Paseo Del Este succeeds.
Hunt Communities executive Gary Sapp and El Paso Water Utilities President/CEO Edmund Archuleta agree that land "entitled to water delivery" is worth $19,000 per acre more than land that is not.3 Therefore, the PSB increased the value of Hunt Communities' land by $106 Million ($19,000 X 5,600 acres).
In 2004, the PSB began negotiations to purchase water from an affiliate of Hunt Communities in Dell City.5, 6 Water customers will pay $508 Million for pipelines and facilities to import the water plus $57 Million a year for operating costs.7 The PSB will pay $2.63 per Ccf to replace the water that they are selling to Hunt Communities for $1.50 per Ccf.
The PSB had no legal obligation to provide water and sewer service to Paseo Del Este. Why would the PSB enrich Hunt Communities by $106 Million at the expense of El Paso citizens? Why would the PSB agree to export 14.6 million gallons a day (enough for 100,000 El Paso citizens) during a water shortage? Why would the PSB sell our water to Hunt Communities for $1.50 per Ccf and then make us pay to buy it back from a Hunt Communities Affiliate at a cost of $2.63 per Ccf?7
Is the PSB corrupt? We may never know. But we do know that the President/CEO is probably the highest paid municipal employee in the United States. He makes $508,00016 a year compared to a national average of $114,00017 for municipal employees in his position.
We know that he acquired $75713 Million worth of new assets and water production went down 6%.14 We know that he plans to spend another $$226 Million20 to subsidize growth but nothing to import water in the next ten years. We know that his long range plan calls for citizens to pay $630 Million18 to import water after he retires. And we know that citizens must pay off $450 Million of debt that he will leave behind.
City Manager Joyce Wilson says "Under the state law, the management and control of the PSB is vested in the board of trustees and neither the Council nor I have any control over their actions."11
The PSB monopoly is accountable to no one.
1.June 3, 2003 Memo from Rick Gairdina & Associates, Inc.
2.February 5, 2006 article by Dan Huff posted on Hunt Communities website.
3.Newspapertree, East Side Growth Fuels Developing Battles, by Sito Negron, 9/05/05 http://www.newspapertree.com/politics/687-east-side-gr0wth-fuels-development-battles
4.Integrated Water Management Strategies for the City and County of El Paso, Bill Hutchinson, Water Resources Manager, El Paso Water Utilities, Page 7
http://www.ucowr.siu.edu/proceedings/2006%20Proceedings/2006%20Conference%20Proceedings/Wednesday%20Sessions%2015-19/Session%20(17)/17.3.%20Hutchison.pdf
5.El Paso Inc., March 14, 2004
http://www.texaswatermatters.org/pdfs/news_155.pdf
6.US Water News on Line, March 2004
http://www.uswaternews.com/archives/arcsupply/4elxxpaso3.html
7.Integrated Water Management Strategies for the City and County of El Paso, Far West Texas Planning Group, January 5, 2006, Page29
http://www.riocog.org/EnvSvcs/FWTWPG/2006%20Regional%20Plan/El%20Paso%20Integrated%20Water%20Management%20Strategies.pdf
8.https://www.citizensmakethecall.com/conservation_or_confiscation.htm
9.https://www.citizensmakethecall.com/trickle_down_economics.htm
10.The PSB charges $1.50 per CCF to Paseo Del Este. There is no water replacement charge or excess usage charge. The PSB charges its own residential customers from $1.45 to $4.87 per CCF depending on how much water they use. There is also a $5.91 water replacement charge.
11.LetterfromCityManager
12.Letter from PSB dated March 19, 2009
13.http://www.epwu.org/financial/reports/2008/CAFR_08_stats.pdf Schedule A-4
14.http://www.epwu.org/financial/reports/2008/CAFR_08_stats.pdf Schedule B-4
15.http://www.elpasotexas.gov/muni_clerk/agenda/10-14-08/10140818B.pdf
16.https://www.citizensmakethecall.com/ceo_employment_contract.htm
17.2007 AWWA Water Utility Compensation Survey viii
18.Letter from the PSB dated February 13, 2008
19.Hot debate over the impact of a fee proposal by Sito Negron. Newspaper Tree October 8, 2008.
20) http://newspapertree.com/news/3811-council-split-5-4-approves-impact-fees-on-new-development-builders-upset
