1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Special Session 10 Wednesday, June 2, 2004 11 9:00 a.m. 12 Commissioners' Courtroom 13 Kerr County Courthouse 14 Kerrville, Texas 15 16 17 18 19 20 21 22 23 PRESENT: PAT TINLEY, Kerr County Judge H. A. "BUSTER" BALDWIN, Commissioner Pct. 1 24 WILLIAM "BILL" WILLIAMS, Commissioner Pct. 2 JONATHAN LETZ, Commissioner Pct. 3 25 DAVE NICHOLSON, Commissioner Pct. 4 2 1 I N D E X June 2, 2004 2 PAGE 1.1 Consider and discuss adoption of Resolution 3 to protest excess rate increase by Aqua Texas 3 4 1.2 Consider and discuss and take appropriate action on a plan to oppose the rate increase on behalf 5 of Kerr County constituents 27 6 --- Adjourned 53 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 On Wednesday, June 2, 2004, at 9:00 a.m., a special 2 meeting of the Kerr County Commissioners Court was held in the 3 Commissioners' Courtroom, Kerr County Courthouse, Kerrville, 4 Texas, and the following proceedings were had in open court: 5 P R O C E E D I N G S 6 JUDGE TINLEY: Okay, let me call to order the 7 special Commissioners Court meeting scheduled for this date 8 and time, Wednesday, June 2nd, 2004, at 9 a.m. This matter 9 was posted at the request of Commissioner Williams 10 concerning the water matters. First item on the agenda is 11 consider and discuss the adoption of a resolution to protest 12 excess rate increase by Aqua Texas. I say Commissioner 2; 13 it actually shows Commissioners 1 and 2. 14 COMMISSIONER WILLIAMS: It does. It shows 15 both of us. We've been in there collaborating. Inasmuch as 16 the preponderance of -- 17 COMMISSIONER BALDWIN: There you go again. 18 COMMISSIONER WILLIAMS: -- the small water 19 systems in Kerr County are in Precincts 1 and 2, we thought 20 maybe the Court would like to join with us in fashioning a 21 strategy to deal with this issue and help people register 22 their protests to T.C.E.Q. and whatever else might take 23 place. So, Commissioner Baldwin and I, after talking it 24 out, believed we had a couple things we needed to do, and 25 one was the adoption of a strong resolution by this Court 6-2-04 4 1 that protests the rate increase as being substantial and 2 unjust rate increases. And to go on and to ask other sister 3 counties who comprise Aqua Texas' designated southwest 4 region -- that's the only way I can put it, 'cause that's 5 kind of a gerrymandered term they put together, but it makes 6 up their southwest region, and we would ask the Court to 7 allow this resolution to be passed on to all these other 8 counties, and urge them to do the same thing. So, without 9 any further ado, Judge, if it's appropriate -- Commissioner 10 Baldwin, you want to add some comments to the opening? 11 COMMISSIONER BALDWIN: No, other than, to me, 12 there's two keys to this, to make this thing work. One is 13 that I'm -- I'm excited that the Commissioners Court's 14 taking this leadership role in the thing and coordinating 15 the efforts. That's a good thing. But there's a limited 16 amount of work that we can do on the thing. The environs 17 out in the county have to write their letters. I'm going to 18 say that every time that we're together, because I think 19 that that is so important that it needs to be said over and 20 over again. They have to write their letter. We can't 21 write letters for them. They have to write their letters, 22 and we can coordinate and do things all day long, but until 23 the public gets their letters written in protest -- in 24 opposition, then nothing's going to happen. So, it's 25 just super, super important that everyone understands that, 6-2-04 5 1 even though the Court is doing the things that we're doing, 2 it's -- it won't work until the public writes the letter. 3 Number two, of us contacting the other counties and 4 encouraging them to get involved something similar to the 5 way that we are getting involved, if that doesn't happen, 6 again, this -- this plan won't work at all. Because we have 7 to -- you have to have 10 percent of the users in that 8 region, and Kerr County can have our 10 percent, but if the 9 rest of the region doesn't come up to their -- rise up to 10 their 10 percent, it's an automatic increase. So, we have 11 to contact these other counties and encourage them to get 12 involved. 13 COMMISSIONER WILLIAMS: I agree. And one 14 comment; one of the Commissioners noted that I had placed 15 the rates in the -- in the proposed resolution, which we'll 16 read into the record here in just a moment, and the rates as 17 I calculated them on the -- in this booklet run anywhere 18 from 56 percent for a user of 10,000 gallons, up to a max -- 19 up to a potential of 70 -- 70-some-odd percent. 77 percent, 20 I believe. And, the reason I did that is because -- putting 21 in that range of rate increases is because, if you calculate 22 all the rates that they have asked for, depending on the 23 size of the pipe that goes into your property, those rates 24 range all the way up to as high as 133 percent. And they 25 ask for -- in their opening statement, I believe I read -- 6-2-04 6 1 they say they need something like 40 percent to -- to take 2 care of their capital needs. But the fact of the matter is, 3 they're asking for 56 percent, and if it's phased in over 4 the four-year period of time, it actually becomes 77 percent 5 compounded. So, I put that in there because -- just to show 6 the illustration, while asking for 40, they are in reality 7 trying to raise 56 percent in a one -- in a one-shot 8 increase. Anyhow, Judge, let me put this in the record and 9 we'll see if the Court goes with it. 10 "Whereas, Aqua Utilities, doing business as 11 Aqua Texas, Incorporated, CCN 11157 and 20453, and 12 AquaSource Development Company, doing business as Aqua 13 Texas, Inc., CCN 12902 and 20867, have submitted a rate 14 change application to the Texas Commission on Environmental 15 Quality, T.C.E.Q., affecting all customers in their 16 southwest region, including those in 40 separate water 17 companies in Kerr County; and 18 "Whereas, the proposed effective date of the 19 rate increase is July 13, 2004, or the first day of a 20 customer's billing cycle beginning on July 13, 2004; and 21 "Whereas, Aqua Texas, Incorporated, asserts a 22 need for a 40 percent rate increase to cover capital 23 investments, it nonetheless has published rate increases to 24 Kerr County water customers that are 56 percent unphased, 25 and a four-year phased schedule that compounds to 6-2-04 7 1 77 percent, which is a substantial and unjust amount; and 2 "Whereas Kerr County water customers whose 3 property and water service is outside a municipal 4 jurisdiction must ultimately rely on the T.C.E.Q. to act 5 upon the company's phase-in proposal before July 13, 2004, 6 or face an immediate rate increase of 56 percent, leaving 7 undetermined possible successive rate increases; and 8 "Whereas, to cause T.C.E.Q. to conduct a 9 public hearing on the substantial and unjust rate increase 10 proposal, it is necessary for at least 10 percent of Aqua 11 Texas' water customers in their southwest region to register 12 individual protests before the 91st day after the proposed 13 effective date of July 13, 2004; now therefore be it 14 "Resolved, that Kerr County Commissioners 15 Court does hereby officially protest the proposed 16 substantial and unjust rate increases, and urges the 17 T.C.E.Q. to conduct a public hearing on this matter, at 18 which time it will receive testimony from affected 19 customers, and cause Aqua Texas to justify its proposed rate 20 structure; and be it further 21 "Resolved, that Kerr County will contact 22 Bandera, Bexar, Burnet, Comal, Hays, Kendall, Live Oak, 23 Medina, Nueces, Travis, Williamson, and Wilson Counties, and 24 provide each with a copy of this resolution, and urge all to 25 take a similar action on behalf of their customers in the 6-2-04 8 1 Aqua Texas southwest region." I move the resolution. 2 COMMISSIONER NICHOLSON: Second. 3 COMMISSIONER BALDWIN: I second the -- second 4 the motion. 5 JUDGE TINLEY: Okay. Motion made and 6 seconded for adoption of the resolution. We have some 7 members of the public who have asked to be heard on this 8 matter, and I think it's appropriate that we hear from them 9 now. The first one I have here is Mr. Cornelius van Bavel. 10 Sir, if you would like to come forward and tell us what's on 11 your mind about this matter? 12 MR. VAN BAVEL: Thank you, Judge, members of 13 the Commission. I want to start out with thanking you from 14 the bottom of my heart for what you are starting to do. 15 And, as a matter of fact, I have been asked, on behalf of 16 the homeowners' association, of which I'm not an officer, 17 but a member -- I have been an officer for several years -- 18 to do more or less the same thing at our level that the 19 Commission is trying to do, hopefully with a great deal of 20 success in the county, as well as in the neighboring 21 counties, which might even be more important. So, thank you 22 very much. What -- I'd like to point out two things. One 23 is maybe a small matter, but Commissioner Baldwin is 24 correct, of course, when he says that in the end, only a 25 customer of Aqua Texas can file a protest. Now, it so 6-2-04 9 1 happens that our -- our homeowners' association -- and I'm 2 quite sure all homeowners' associations are also customers, 3 because we have public facilities that are served with 4 water. We have a water meter, and we also are going to 5 suffer the consequences of this increase. So -- and I have 6 started to find out where all and who is running these 7 homeowners' associations in Kerr County. And something 8 similar, of course, could be done in the other counties. 9 Just how that is going to happen, I'm not quite sure. I'm 10 not even quite sure how I am going to find out who the 11 officers are of these about 14 or 15 homeowners' 12 associations in Kerr County. Anyway, that's my problem. 13 The second thing that I want to point out -- 14 and I point this out as an individual who is a lifelong 15 proponent of conservation of water. In fact, I got paid to 16 teach this and to research this for many, many years, and I 17 want to point out something that perhaps hasn't occurred to 18 you. That the way -- that the way this rate structure is 19 now going to be in place, but already is in place, 20 discourages conservation, because the money mostly comes out 21 of the connection fee, not out of the water fee. And 22 Commissioner Williams is quoting the numbers for what they 23 call an example customer who uses 1,000 -- pardon me, 24 10,000 gallons a month, but there are very few individual 25 homeowners, particularly out in what you call the 6-2-04 10 1 environs -- and that's us, also -- that use that much water. 2 So, actually, when I'm going to pay my next bill, or the 3 next -- over the next month; that's the first one that's 4 going to hit me, I am going to pay twice as much, roughly, 5 but I don't get any -- no incentive. Even if I didn't use 6 any water, I still have to pay $46. 7 And so, even though the unit -- the price of 8 a unit of water, which is 1,000 gallons, has also increased, 9 of course, but still, it's -- I shouldn't say "only" -- it 10 is as little as $2.50. And, you know, multiply it with 11 maybe 3,000 -- maybe three, maybe four; depends on if it's 12 summer or winter. But the main -- the main burden is for -- 13 just for being connected. In other words, we're not buying 14 water; we're buying a water meter. That's all. And, in my 15 opinion, this kind of a structure is totally wrong. It's 16 okay to be charged for a connection, but with that, you 17 should -- and it used to be like that. You should get a 18 certain amount of water that, by adopted standards, 19 including the Commission to which we are going to apply, is 20 sufficient, and that amounts to somewhere between 2,000 and 21 3,000 gallons per month for an average family, which is 22 supposed to be 3.8 persons. 23 So, I protest the nature of this whole rate 24 structure. It is against conservation. That extra couple 25 of dollars that I will waste by insufficient water, by 6-2-04 11 1 letting the -- the toilet run when it's not -- when it ought 2 to be fixed, et cetera, et cetera. We need conservation. 3 And when people use too much, it should hurt them in the 4 their pocket. This is not going to hurt anybody in his 5 pocket particularly, when $600, $700 per year goes just for 6 being connected. Not -- for example, our homeowners' 7 association has two or three taps at the lake. I don't 8 think we use more than 400 gallons a month, but we still are 9 going to have to pay that $46. So, I thought I'd point it 10 out to you. And I am not suggesting that it be part of this 11 resolution, but if there's going to be an argument about it 12 with the company, I think -- and with the Commission, we 13 should point this out. This is an anti-conservation rate 14 structure. Thank you for your time. 15 JUDGE TINLEY: Thank you, sir. The next 16 individual that we have who has indicated a desire to speak 17 is Mr. Don T. Brady representing the Cypress Springs 18 Property Owners' Association. 19 MR. BRADY: Thank you, Judge. And, here 20 again, I reiterate our thanks for y'all participating in 21 this effort. Apparently, those of us who are outside the 22 city limits don't have any spokesperson other than the 23 Commissioners Court. That's about it, just from what I'm 24 hearing. Also, Commissioner, your calculations pretty well 25 match what I came up with. 6-2-04 12 1 COMMISSIONER WILLIAMS: I'm glad. Thank you. 2 I thought maybe my calculator was screwy. 3 MR. BRADY: I'm not going to be picky-picky, 4 but they're pretty well in the ballpark there. 5 COMMISSIONER WILLIAMS: Thank you, sir. 6 MR. BRADY: An onerous rate increase. And, 7 frankly, the unphased proposal that they have proposed, to 8 me, is just pure intimidation. You know, if we don't go 9 along, they're going to stick that in our ear. I also 10 found, in perusing the information there -- I have a 11 5/8-inch meter, and I found any number of errors in the 12 published data for existing rates. I called AquaSource, and 13 the young lady confirmed that it was erroneous, and we 14 agreed on what the figure should have been. And, at the 15 same time, in discussing with her, I told her, I said, 16 "Look, my background is in the electric utility business, 17 and I am not unfamiliar with how rates are done there and 18 how the system buyouts occur and so forth and so on." And I 19 said, "Any time we did a rate increase, you know, the paper 20 had comparable rates. This is what our rates are. This is 21 what we propose. This is this city. This is Houston 22 Lighting and Power, whatever they are now, to see what the 23 comparable rates are." And, the young lady told me -- said, 24 "Well, you don't have any other source down there." I said, 25 "Well, that's my understanding." She said, "So that's not 6-2-04 13 1 relevant." Well, that -- I'm sure their management would 2 not agree to that. I also suspect -- and I'm new here. I 3 moved here in April of 2002. 4 COMMISSIONER BALDWIN: Welcome. 5 MR. BRADY: Thank you very much. I've 6 enjoyed it greatly. I also suspect that their rate basis 7 calculations need to be perused. It's my understanding they 8 put all the purchases of these little systems together over, 9 what, a three- or four-year period? Maybe five. 10 COMMISSIONER WILLIAMS: Since the last rate 11 struggle. 12 MR. BRADY: Okay. I do know, with my 13 experience where we would make a proposal to buy a municipal 14 electric system, first thing you do is you go in and you 15 carefully analyze it and you see how much money you've got 16 to spend to bring it up to date, and that's factored into 17 the purchase price. I really wonder if this is what they 18 did here, since they're saying they've had to spend all this 19 money to bring these things up to date. Well, they didn't 20 get out-of-date overnight, so it would appear that, in the 21 perusal, that should be part of it done by the T.C.E.Q. I 22 think, just -- just as a thought, you know, they've lumped 23 all these people -- all these little systems together. I 24 don't know how much commonality was done in that process, 25 but I don't think we're going to be very successful in 6-2-04 14 1 attacking that, because the ratemaking people like that. 2 The people in Austin like that. Now, if we can somehow 3 determine a commonality between our group and some others, 4 yes, we can address it in that fashion. But, rest assured, 5 the T.C.E.Q. would much rather hear four rate cases than 25. 6 So, some judicious thought needs to go into that. 7 Gentlemen, I thank you. We appreciate your helping. 8 COMMISSIONER LETZ: Thank you. 9 JUDGE TINLEY: Thank you very much, sir. We 10 appreciate you being here. The next individual that has 11 indicated a desire to speak is Mr. Charlie Eller. 12 MR. ELLER: Judge, Commissioners. I've lived 13 here 20 years in the same spot with the same water company. 14 It changed names many times. But, having dealt with 15 hundreds of utility companies in my career, this is the most 16 unresponsive single company I ever had to deal with. That's 17 probably not here nor there. They bought a broken-down 18 water system at a broken-down price, but I submit that's a 19 battle to be fought at the public hearing. What the 20 Commissioners Court's going to do is pretty well laid out 21 here. It's what you can do. You can testify at the public 22 hearing also. Having dealt with utility companies, I would 23 make one suggestion on the petition; that you remove any 24 numbers from it. These things -- 25 COMMISSIONER WILLIAMS: From the resolution? 6-2-04 15 1 MR. ELLER: In the resolution. The reason 2 being that if you object to me raising it 70 percent, I can 3 try to convince somebody you won't object to 68. All right? 4 But if you object to an "excessive" increase and words like 5 that, then nobody can whoop you with it. So, I -- that's my 6 suggestion. I would like to commend the Court for the 7 action they're taking. This is the kind of action I want my 8 Commissioners and my Judge to take, to try to save money for 9 the people, try to let the people keep their own money, and 10 I appreciate it and I thank you. 11 JUDGE TINLEY: Thank you, sir. 12 COMMISSIONER NICHOLSON: Mr. Eller, one 13 question, please. I have a list of the water systems -- or 14 subdivisions in Kerr County, and I don't see Greenwood 15 Forest on that. Are you part of the city of Ingram system? 16 MR. ELLER: Well, it -- it's -- we're not a 17 part of the city of Ingram. We're outside the city limits. 18 When Danny Edwards fought the case last time on rates in 19 Ingram, because Ingram has a rate-making power, he included 20 Greenwood Forest, and was able to get the water company to 21 agree to include us, but I'm not sure that it's legal. You 22 know, I just don't know. 23 COMMISSIONER WILLIAMS: Which water company 24 would that be? Is it listed as Greenwood Forest? 25 MR. ELLER: Yeah, its Aqua Tex -- Aqua Texas. 6-2-04 16 1 COMMISSIONER WILLIAMS: Okay. 2 MR. ELLER: The same thing. 3 COMMISSIONER WILLIAMS: Okay. 'Cause I'm 4 like Commissioner Nicholson; I didn't see it in here either. 5 Trying to identify all of them. 6 MR. ELLER: It was AquaSource. 7 COMMISSIONER WILLIAMS: Okay. 8 COMMISSIONER NICHOLSON: I think the only 9 question is, is Greenwood Forest one of the so-called 10 environs, or is it represented by Ingram? 11 JUDGE TINLEY: Included as part of Ingram, 12 correctly or not? 13 COMMISSIONER NICHOLSON: Yeah. And 14 probably -- probably Judge Edwards knows the answer to that. 15 COMMISSIONER WILLIAMS: He probably does. 16 There's another hidden -- there's another hidden element 17 here, in my view, and what's called it to my attention was 18 the fact that there was only one identified in Precinct 4 on 19 this list, and one identified in Precinct 3. The fact of 20 the matter is, there are others. Wiedenfeld operates 21 several around the county, and there may be others like 22 Charlie who -- Charlie Wiedenfeld, who operate others as 23 well. Those folks are laying low; they're not doing 24 anything. They're waiting to see what happens here. But I 25 would bet a five-dollar bill against a doughnut that once 6-2-04 17 1 this is settled, all the others who are not represented who 2 are -- who are served by these other water companies not 3 identified here, those customers will face the same 4 increases that this is talking about. 5 MR. ELLER: Probably so. I am told by the 6 city of Ingram to enter my protest with them, and then I'm 7 told by other people that I can't enter a protest in Ingram; 8 that it would have no impact whatsoever. So, I'm -- I've 9 just shotgunned them; I protest everywhere. 10 COMMISSIONER LETZ: Protest both. 11 MR. ELLER: Both places. Thank you, sir. 12 COMMISSIONER WILLIAMS: Both directions. 13 JUDGE TINLEY: Thank you. Is there anybody 14 else here today that wishes to be heard with respect to this 15 matter? Irrespective of whether you've signed a 16 participation form or not, we'd welcome you to come forward 17 and tell us what's on your mind about this. Yes, sir? 18 Please come forward. Give your name, if you would, and 19 address for the reporter. 20 MR. LAMBERT: Pardon. Yes, my name's Clayson 21 Lambert, and I'm in Precinct 1, just outside of the city 22 limits, next door to Horseshoe Oaks, which is served by 23 formerly AquaSource, and now Texas Aqua, and we are tied 24 into that system. A number of the things that I wanted to 25 mention to you today have already been brought up. One is a 6-2-04 18 1 comparison to electrical utilities. I just can't possibly 2 see an electrical utility telling its customers that because 3 it has some expenses in putting in additional transmission 4 lines, that it's now going to pass those expenses on 5 immediately, in a 60, 70 percent over four-year term, to its 6 customers. I'm not sure, because I've been out of the 7 country for many, many years, and I'm not completely up to 8 speed with -- with some of the legal ramifications of 9 utility companies, but I'm wondering if there is some 10 comparison where you could look at -- you know, they have 11 certain costs, and they have certain labor costs, and there 12 are normal factors that sometimes increases are tied to; 13 cost-of-living increases and labor increases in certain 14 sectors and this sort of thing. And when you exceed by 15 several times what are accepted norms like that, that seems 16 very excessive. 17 I think one other thing that would be 18 interesting to do in the way of research is to see if any 19 other water utility company similar to this one has -- has 20 ever approached increases of this magnitude. I'm not sure 21 who will be available to do that research. I guess that 22 will occur also in public hearings on this, but it seems 23 very absurd. And then, I guess, on the last comment -- and 24 by buying up all of these -- or the majority of the smaller 25 companies and unifying them under one body, they in effect 6-2-04 19 1 have a monopoly on the private water systems here now. And, 2 since this is a publicly traded company, I would question 3 why they can't throw a little more stock out there or 4 something else to get the revenues that they need. 5 Obviously, if they bought these companies and there were 6 some problems with them and they needed upgrades, as was 7 mentioned earlier, that should have been factored in. And I 8 think it's -- it's not right for their stockholders to sit 9 there and reap the benefits of all these increases while 10 their valued customers that keep the company alive have to 11 take the brunt of all their additions. Thank you, 12 gentleman. 13 JUDGE TINLEY: Thank you, Mr. Lambert. Is 14 there anyone else that wishes to be heard on this particular 15 issue? We'd welcome you to come forward and speak your 16 mind. Anyone else? 17 (No response.) 18 JUDGE TINLEY: I have a couple of thoughts 19 about the resolution as tendered, and upon which the motion 20 was made. The use of specific numbers concerns me, specific 21 amounts, and -- but for a little different reason than -- 22 than Mr. Eller indicated. As one gentleman said, I ran the 23 calculations and mine were about the same as yours. Well, 24 everybody can run these numbers and come out with a little 25 different number. I think we should omit any specific 6-2-04 20 1 figures in the resolution to avoid two things. One is, if 2 some third-party -- any third-party calculates it 3 differently, number one, it's going to cause a focus to be 4 on the variance in the numbers, and that's not really what 5 this is all about. Secondly, if the numbers are calculated 6 slightly differently, it may cause a loss of credibility to 7 the resolution as a whole. So, for that reason, I would 8 suggest that we make more generic references, and I've got 9 some proposed language that I'll be glad to -- to suggest 10 here in a moment. 11 The other thing that I would like to point 12 out, in fairness, is that the whole purpose of the rate 13 hearing is to determine the propriety and the justness of 14 the proposed rate increase, and that's what we're seeking to 15 have accomplished, is a hearing. And, therefore, both sides 16 get an opportunity to be heard. There are a couple of 17 places in here where it is concluded to be an unjust rate 18 increase before there's a request for the T.C.E.Q. to hold a 19 hearing and to cause Aqua Texas to justify its proposed rate 20 structure, which is the end question. So, where we 21 denominate it as being "unjust," I think we should possibly 22 say "possibly unjust," to give them at least the benefit of 23 the doubt until the -- until the hearing is held, because 24 that's what it's all about. But those are my two thoughts 25 about the resolution. And when we get to that point, I can 6-2-04 21 1 offer alternate language. 2 COMMISSIONER BALDWIN: Judge, I agree with 3 you a hundred percent on the number issue. And, to put it 4 in terms of us old country boys, what you just said was some 5 lawyer could get ahold of that and make us look stupid. 6 And -- 7 JUDGE TINLEY: Although we know we're not. 8 COMMISSIONER BALDWIN: That's what you said. 9 Although we're not. 10 JUDGE TINLEY: Of course. 11 COMMISSIONER BALDWIN: Absolutely. 12 COMMISSIONER LETZ: Pretty much -- I had two 13 things I wrote. I think we need something to the effect of, 14 "far exceed 40 percent," as opposed to specific numbers, for 15 the same reasons that were stated by the Judge and 16 Mr. Eller. The other thing that -- I think a word that I 17 didn't see in here that I think needs to be added in some 18 places is "inequitable." Because the problem that I have 19 is, I know -- and I've talked -- you know, there's only one 20 listed in my precinct, being Falling Water. I've talked to 21 that association, and they're really bent out of shape. 22 It's a brand-new, excellent system, as is Cypress Springs, 23 another one that's in Precinct 4, and they're -- they don't 24 need any upgrades, and they're being forced to pay for 25 upgrades in systems that, you know, Aqua Tex bought at one 6-2-04 22 1 point or another that does need some upgrades, and that 2 really bothers them. So, I think that the inequitable 3 nature of the increase, the way it's proposed, needs to be 4 added in. And it could probably be added wherever we say 5 the word "unjust." I think could you add -- 6 COMMISSIONER WILLIAMS: That's just where I 7 put it down. 8 COMMISSIONER LETZ: And possibly unjust. 9 COMMISSIONER WILLIAMS: Substantial, 10 inequitable, and unjust. 11 COMMISSIONER LETZ: Something to that effect. 12 Those are the comments that I had. 13 COMMISSIONER NICHOLSON: I don't have any 14 specific comments. I'm really impressed and appreciate the 15 good work, and done in such a timely way, that Commissioners 16 1 and 2 have done. It's, in my view, a really good reaction 17 to an important need of our constituents, so I'm very 18 pleased with it. I'll have some more comments when we get 19 to the action plan. 20 COMMISSIONER WILLIAMS: What -- what are your 21 thoughts, Judge, so we can clean it up here and amend it? 22 JUDGE TINLEY: In Paragraph 3, beginning at 23 the end of the second line, "...increases to Kerr County 24 water customers that appear to be inequitable and 25 substantially in excess of that amount," semicolon. And 6-2-04 23 1 then, coming down to the fourth paragraph, in the third 2 line, "... July 13, 2004, or face an immediate significant 3 double-digit rate increase, comma, leaving undetermined..." 4 In the next paragraph, the first line, "...conduct a public 5 hearing on this substantial, comma, inequitable, and 6 possibly unjust rate increase..." As a matter of form, 7 after the semicolon at the end of that paragraph, move the 8 "now, therefore" over to the far left, and in all caps, "NOW 9 THEREFORE, BE IT" and then the Resolved. In the first 10 Resolved paragraph, have that read, beginning at the end of 11 the first line, "...protest the proposed rate increases," 12 'cause that's what they're considering, and line out the 13 "substantial and unjust" there. 14 COMMISSIONER WILLIAMS: Take out the 15 descriptive adjectives? 16 JUDGE TINLEY: Uh-huh. "...hereby officially 17 protest the proposed rate increases...," where it reads that 18 way. And then, of course, as a matter of clean-up at the 19 very bottom, "Resolution," there's a "1" in there that needs 20 to be kicked out. That may have -- 21 COMMISSIONER WILLIAMS: That's out. 22 JUDGE TINLEY: That's been taken out of the 23 final? Okay. 24 COMMISSIONER WILLIAMS: That's out of there. 25 COMMISSIONER LETZ: The -- what computer is 6-2-04 24 1 this -- is this on Kathy's? 2 COMMISSIONER WILLIAMS: Kathy's got it, yeah. 3 COMMISSIONER LETZ: I'd recommend that we let 4 Kathy clean that up and go to the next agenda item. That 5 way, we can come back and look at the exact form. 6 COMMISSIONER WILLIAMS: You got it all, 7 Kathy? 8 (Ms. Mitchell shook her head negatively.) 9 JUDGE TINLEY: I -- I did a little word 10 jockeying as I went, so it's not in here exactly like I 11 brought it out, but I can -- 12 COMMISSIONER LETZ: Maybe we can take a 13 five-minute recess, and -- 'cause I think it would be 14 helpful. I'd like to see the exact form. 15 COMMISSIONER WILLIAMS: I agree. 16 JUDGE TINLEY: I would too. 17 COMMISSIONER WILLIAMS: Yeah. 18 COMMISSIONER NICHOLSON: Yeah, we'd like to 19 sign it before we leave here. 20 JUDGE TINLEY: Yeah. 21 COMMISSIONER BALDWIN: Absolutely. 22 MR. ELLER: Judge? I don't -- I don't know 23 if this draft letter is going to be distributed or published 24 or what, but if it is, let's -- let's try to outrun the 25 lawyers. Texas Commission "in" Environmental Quality should 6-2-04 25 1 be -- 2 COMMISSIONER WILLIAMS: We've kind of 3 revised -- yeah, that should be Texas commission "on." On. 4 JUDGE TINLEY: There's been some cleanup, 5 Mr. Eller, since that original draft came out. 6 MR. ELLER: Okay. 7 COMMISSIONER WILLIAMS: But this needs to be 8 changed. 9 JUDGE TINLEY: Yeah. Yeah. 10 COMMISSIONER WILLIAMS: It's "of," I believe 11 isn't it? Or "on." T.C.E.Q., Texas Commission -- 12 JUDGE TINLEY: I think it's "on." 13 COMMISSIONER WILLIAMS: -- on Environmental 14 Quality. 15 JUDGE TINLEY: On or of. 16 MR. ELLER: Well, it's "on" in the resolution 17 and the petition, but it's "in" on the letter. 18 JUDGE TINLEY: We'll get that cleaned up. 19 COMMISSIONER WILLIAMS: Yeah. 20 JUDGE TINLEY: Okay. Why don't we stand in 21 recess for about five minutes, and I'll get me a clean one 22 and I'll go to work here. 23 (Recess taken from 9:39 a.m. to 9:51 a.m.) 24 - - - - - - - - - - 25 JUDGE TINLEY: Okay. Let's come back to 6-2-04 26 1 order. We took a short recess to try and work on this 2 resolution a little bit. Copies are being distributed now. 3 Okay, thank you. 4 COMMISSIONER BALDWIN: Thank you, ma'am. 5 JUDGE TINLEY: I think it's important that we 6 got the "inequitable" in there, Commissioner Letz, and it 7 addresses the issue that one of the gentlemen mentioned 8 about the brand-new system and they're having to bear the 9 cost of some of the older, more antiquated systems. And 10 that, I think, is a needed issue. 11 COMMISSIONER WILLIAMS: Judge, while not 12 reading the entire thing, maybe those in the audience would 13 like to hear at least the two paragraphs that have the 14 substantial changes that we made. Paragraphs 1 and 2 remain 15 basically the same. Paragraph 3 changes to read, "While 16 Aqua Texas, Inc., asserts a need for a 40 percent rate 17 increase to recover capital investments, it nonetheless has 18 published rate increases to Kerr County water customers that 19 appear to be inequitable and substantially in excess of that 20 amount." And then the next paragraph, "Whereas, Kerr County 21 water customers whose property and water service is outside 22 a municipal jurisdiction must ultimately rely on T.C.E.Q. to 23 act upon the company's phase-in proposal before July 13, 24 2004, or face an immediate, significant, double-digit rate 25 increase, leaving undetermined possible successive rate 6-2-04 27 1 increases." And I think the rest is substantially the same. 2 Is that correct? 3 JUDGE TINLEY: We did a slight deletion in 4 the first Resolved paragraph, just referring to proposed 5 rate increases, and we deleted the adjectives, but other 6 than that, it's the same. 7 COMMISSIONER WILLIAMS: I accept the 8 amendments, Judge. 9 JUDGE TINLEY: And move adoption as 10 redrafted? 11 COMMISSIONER WILLIAMS: Yes, sir. 12 COMMISSIONER BALDWIN: Second. 13 JUDGE TINLEY: All right. Any further 14 question or discussion? All in favor of the motion, please 15 signify by raising your right hand. 16 (The motion carried by unanimous vote.) 17 JUDGE TINLEY: All opposed, same sign. 18 (No response.) 19 JUDGE TINLEY: The motion does carry. The 20 next item on the agenda is consider and discuss and take 21 appropriate action on a plan to oppose the rate increase on 22 behalf of Kerr County constituents. 23 COMMISSIONER WILLIAMS: Do you want to do it? 24 COMMISSIONER BALDWIN: No, go ahead. You're 25 doing fine. 6-2-04 28 1 COMMISSIONER WILLIAMS: In brainstorming how 2 best to move this along, Commissioner Baldwin and I came up 3 with some thoughts that would constitute a sort of a 4 strategy that the Court can -- can be involved in from the 5 get-go to the end. And, for the benefit of those of you in 6 the audience, let me go through those. Number one is to 7 adopt a resolution strongly protesting. We have just done 8 that. Authorize the County Judge to correspond with the 12 9 other counties identified. That's embodied in the 10 resolution; that will take place. The third one, then, is 11 authorize a Town Hall-style meeting at the Hill Country 12 Youth Exhibit Center June 14th at 7 p.m., inviting all 13 interested customers of the 40 individual water companies 14 owned by Aqua Texas to attend for the purpose of mobilizing 15 a county-wide protest effort. Number 4 says what we need 16 to -- it just says that this will be a posted meeting so all 17 members of the Court can participate. 18 Number 5, then, would be to prepare 19 information as to how best to voice opposition and seek a 20 public rate hearing, and -- and distribute or have available 21 for people -- excuse me -- a model letter to be made 22 available to those in attendance, with instructions on how 23 best to assure delivery to its appropriate destination, and 24 to prepare and have available and distribute an appropriate 25 petition -- we have that ready today; we'll talk about it -- 6-2-04 29 1 with a heading on it that -- that says what it needs to say 2 to get the attention of those it needs to get, and -- and so 3 forth. Our thought in all of this was to, at the meeting, 4 let folks in attendance have the model letter. But, as 5 Commissioner Baldwin said, they must do it in their own 6 handwriting. The model is only to -- to give them the 7 pertinent information they need, with a suggested format. 8 That suggested format on both the model letter and the 9 petition heading came from our working with Mr. Edwards, 10 who's been down this road before, so these are his thoughts 11 as to what we need to properly get the job done. 12 We went on to think about how best to do this 13 and give it some impact, or give it some -- the force of 14 Commissioners Court, and the thought was to ask folks -- and 15 this may be something you want to debate and not do it this 16 way; I don't know. But ask folks to mail them back to us, 17 at which time our administrative assistant will make a copy 18 so we have a permanent record, and then we will bundle them 19 all up, and every so often, when we get a big stack, the 20 Judge will write a cover letter and send them off to 21 T.C.E.Q., say, "Here's another batch." That's one thought. 22 You may not like that thought. Judge may not like that 23 thought, but that's a thought, nonetheless. And, secondly, 24 the same with the petitions. We'll be asking, if we get 25 a -- an attendance worthy of this effort, to ask people from 6-2-04 30 1 the various water companies to take the petition, circulate 2 it among those of their fellow customers in their 3 subdivisions or wherever and get those petitions signed, and 4 then bring those back, and we, in turn, will send them to 5 T.C.E.Q. with appropriate covering letter. So, that's kind 6 of the basis of the eight-point plan. It's open for you 7 guys to discuss, kick around, do away with, whatever. 8 COMMISSIONER BALDWIN: One of the reasons for 9 us to receive the letters and make a copy of them and put 10 them in the file -- and our good friend Kathy, I think, is 11 brainstorming behind all that -- is our understanding is 12 that somehow, sometimes these things get lost. The letters 13 get lost between here and Austin, or after they -- even 14 after they arrive in Austin. So this, to me, is a sure way 15 of eliminating that problem, just in case they accidentally 16 get lost over there, we will have a copy of everything. So, 17 I just think that that's a -- that's a good way to go about 18 doing this thing. 19 COMMISSIONER LETZ: I think everything looks 20 good, and I think the idea of having letters come back here 21 is good. I think the thing that I would add -- it kind 22 of -- I think there's time to do it before the June 14th 23 date, is to ask the homeowners' associations to try to have 24 as many -- you know, I agree that they shouldn't use the 25 form letter exactly as we've done it, but I don't know why 6-2-04 31 1 each subdivision and each homeowners' association couldn't 2 have their own form letter, and then basically each 3 individual sign it, and if we could have those letters 4 present at the public hearing, you can get them signed and 5 to us immediately. 6 COMMISSIONER BALDWIN: You mean the Town Hall 7 meeting? 8 COMMISSIONER LETZ: The Town Hall meeting. 9 What did I say, public hearing? 10 COMMISSIONER BALDWIN: Public hearing. 11 COMMISSIONER LETZ: Town Hall meeting. 12 Because a lot of times -- you know, people are busy, and if 13 you have it ready, they can just sign it on the spot while 14 it's on their mind. I think we have a far better chance of 15 getting a larger participation than waiting on, you know, 16 things to get mailed back to us. If we can get them in-hand 17 at that date, I think it would work even better. 18 COMMISSIONER WILLIAMS: One of the things 19 that the model letter -- we worked this out, again, with 20 Mr. Edwards. One of the things the model letter does is, it 21 standardizes the basic information that's necessary to be on 22 record as being opposed to the rate increases, as opposed to 23 some letters I've seen, which the -- the water customer, 24 trying to make his or her point, goes off on an emotional 25 bent. And I don't think the folks in Austin particularly 6-2-04 32 1 want to hear the emotional side of it. They just want to 2 know they got 10 percent, so they're going to either conduct 3 a water hearing or not going to conduct a water hearing. 4 And so, all of -- all this does is gives -- being a 5 ratepayer of Aqua Texas, or whatever I am currently, I 6 protest it. I'm a current resident, signature, print your 7 name, address, state, and the name of your water company. 8 And that's really all that's necessary to get that done. 9 The petition, however, is another matter, and 10 Mr. Edwards helped us in drafting this. He believes that 11 this heading on the petition -- as opposed to just some 12 heading that someone might think is reasonably good and 13 start circulating petitions, he believes that this would be 14 the appropriate way to go. And it reads, "As indicated by 15 my signature below, I am a ratepayer affected by an 16 Application for Rate Increase filed by" -- so forth and so 17 on, with the numbers. And, "If the application is approved 18 as requested, my rate will be substantially and unjustly 19 increased. By my signature below, as a customer of (blank) 20 Water Company, I request that T.C.E.Q. conduct a public 21 hearing as required by law. At such hearing, I request that 22 T.C.E.Q. deny such rate increase, or in the alternative, 23 that it fix a fair and just rate for the system from which I 24 receive service, and not a rate covering multiple systems 25 that have little or no common financial and/or operational 6-2-04 33 1 needs." Which is the point the gentleman from west Kerr 2 made a while ago. And, so, I think this is important, that 3 all these are structured in a way that makes the same point 4 from all the various water companies. 5 COMMISSIONER LETZ: I mean, if it's possible 6 for us to just to get rid of the "draft" letter and have 7 this identical letter available -- 8 COMMISSIONER WILLIAMS: We can do that. 9 COMMISSIONER LETZ: Not even worry about 10 the -- I mean, get the same identical one. 11 COMMISSIONER WILLIAMS: Yeah, it is. We only 12 had "draft" on it so -- it's for your benefit here today, in 13 case you wanted to make some other changes. And I thought 14 that if we agree with this, we'd ask Kathy to print off a 15 ream of them, have them available for people. 16 JUDGE TINLEY: I don't think there's any need 17 to have individualized language. What we're trying to do is 18 satisfy a technical, legal requirement to meet that 19 10 percent. 20 COMMISSIONER WILLIAMS: Exactly. 21 JUDGE TINLEY: And when you place a burden on 22 people to translate this into their own handwriting, even in 23 the exact same language, that creates more work for them; 24 the likelihood they're going to do it goes down. If they 25 can take that -- that very same thing and just fill it out, 6-2-04 34 1 sign it, all we're trying do is accomplish that one 2 technical, legal requirement to meet the 10 percent. 3 COMMISSIONER BALDWIN: And knowing the state 4 agency, which is the other side that receives it, I agree 5 with you 100 percent. That's all they're interested in, 6 is -- 7 JUDGE TINLEY: Mm-hmm. 8 COMMISSIONER BALDWIN: -- getting that. 9 COMMISSIONER WILLIAMS: That's fine. We can 10 make that available. 11 COMMISSIONER LETZ: Mr. van Bavel has a 12 comment. 13 JUDGE TINLEY: Yes, sir? You had a comment, 14 Dr. van Bavel? Come forward, please, sir. 15 MR. VAN BAVEL: I think this letter is 16 excellent, and we need to fill that whole form out. Now, if 17 you are going to depend on this town meeting, you will get 18 some signatures, but not very many. What I am going to do, 19 and that has to be done in every water district, I am 20 personally going to go from house to house with this form 21 and have them fill it out, and I'll bet you that I get every 22 single one of the 30 ratepayers to sign it. But how are you 23 going to get this done in the other districts? That is 24 something that I have been worrying about, and I'm going to 25 try to find out. I was thinking to myself, putting an ad in 6-2-04 35 1 the paper and saying that all these subdivisions, or water 2 districts and/or homeowner associations, because they're 3 also customers, send in their name and address, telephone 4 number so that we can send them a copy of this thing -- 5 which nobody knows it exists -- and ask them to appoint 6 someone to go from house to house and collect these. 7 COMMISSIONER LETZ: I think we have -- I 8 mean, I think that -- I don't know about an ad to go in the 9 paper or not, but we have three representatives, possibly -- 10 possibly more, in the audience. We can give them draft 11 copies right now, and they can, you know, get it to the 12 subdivisions. I'm just saying I think we should have them 13 available at the town meeting so we can get those that come, 14 but that's not going to be a hundred percent; you're right. 15 We need to get -- 16 MR. VAN BAVEL: There's 36 more than the four 17 that are here. 18 JUDGE TINLEY: It's going to be incumbent 19 upon the ratepayers to -- 20 MR. VAN BAVEL: Yes. 21 JUDGE TINLEY: -- try and ascertain a core 22 group within each of the areas affected to assume a 23 leadership role and to circulate these petitions, distribute 24 these -- these letter formats to the residents and 25 ratepayers, so that we can get this accomplished. But the 6-2-04 36 1 key is going to be that, within each of these served areas, 2 each of these subdivisions or whatever they may be, multiple 3 subdivision areas, that someone in that area assume a 4 leadership role, and it's going to be necessary for those 5 that are involved to organize that -- that movement, the way 6 I see it. 7 COMMISSIONER WILLIAMS: That's exactly right, 8 Judge. And I asked -- when I spoke with the representative 9 of the Kerrville Daily Times yesterday, I asked if, when 10 developing the story, the Times would be good enough to list 11 all of these water companies in the story somehow. List 12 them all, so that -- and I would go even further than that, 13 Glenda. Not only in the Kerrville Daily Times, but in 14 whatever it is you're doing with the Mountain Sun these days 15 as well, wherever it goes. Put them in both newspapers so 16 that it gets as broad a coverage as it can by -- in 17 identifying each and every one of these water companies. 18 COMMISSIONER LETZ: One final thing before I 19 forget to mention it. We need to remember to authorize the 20 County Judge to sign a letter and sign the petition, because 21 we are a member -- a ratepayer due to being in Center Point, 22 which is part of this. 23 COMMISSIONER WILLIAMS: That's right, we are. 24 COMMISSIONER LETZ: So, I mean, we're -- 25 COMMISSIONER WILLIAMS: We are. We're part 6-2-04 37 1 of the Center Point system. 2 COMMISSIONER BALDWIN: So -- wait a minute. 3 Say that again? That the -- the actual county government -- 4 COMMISSIONER LETZ: We're a ratepayer. 5 COMMISSIONER BALDWIN: We're an affected -- 6 COMMISSIONER WILLIAMS: Yeah. 7 COMMISSIONER BALDWIN: Affected -- 8 COMMISSIONER WILLIAMS: Yeah. 9 COMMISSIONER BALDWIN: -- county with a 10 water -- 11 COMMISSIONER WILLIAMS: The water in my 12 office in Center Point is AquaSource. 13 COMMISSIONER BALDWIN: And the information 14 that the County Attorney's been e-mailing us that says 15 affected county -- so that we -- we are an affected county, 16 then? 17 JUDGE TINLEY: Well, it -- that particular 18 affected county I'm not sure is going to qualify. 19 COMMISSIONER WILLIAMS: But we are a 20 ratepayer. 21 JUDGE TINLEY: We're a ratepayer. 22 COMMISSIONER WILLIAMS: We're a customer. We 23 are a customer. 24 COMMISSIONER BALDWIN: Wow, this really makes 25 us mad now, huh? 6-2-04 38 1 COMMISSIONER WILLIAMS: Now we're getting 2 down to it. 3 COMMISSIONER BALDWIN: I wanted to point out, 4 I have already received five or six letters. I can't 5 remember the -- Kathy's already started our little file in 6 there. These are copies of letters that -- from people in 7 my precinct that have already mailed them on to Austin and 8 sent me a copy. Some of them are very interesting. Most of 9 them, if -- if we didn't adopt this particular letter here 10 that Judge Edwards has written, I can highly recommend some 11 out of these here, 'cause they're very well-written. One -- 12 I wanted to point out, one is from a realtor that puts the 13 slant on, what does it do to the real estate possibility? 14 What does it do to real estate? I thought that was very 15 interesting. And I have one here that does not oppose the 16 rate increase that you can't have, and it is not going to 17 Austin. It's all mine. 18 COMMISSIONER WILLIAMS: Okay. 19 COMMISSIONER BALDWIN: So, the letters are 20 already pouring in to me. 21 COMMISSIONER NICHOLSON: Couple questions. I 22 think I understand that people like the Ingram City Attorney 23 are going to do some preparation and -- and represent cities 24 at the T.C.E.Q. hearing. How are the environs going to get 25 their preparation organized and presented at the T.C.E.Q. 6-2-04 39 1 hearings? 2 COMMISSIONER WILLIAMS: You know -- I'm 3 sorry. Go ahead, Buster. 4 COMMISSIONER BALDWIN: Well, I just wanted to 5 make a real quick comment. We had talked about this 6 Court -- I can tell you what I think is the best route to 7 go. I don't think that it's a good idea for this 8 Commissioners Court to spend taxpayers' money on this 9 particular issue, because of several reasons. But I do 10 think that it has been mentioned in this courtroom that 11 there's a couple of subdivisions that possibly have some 12 extra change laying around. Go down to the bank and open up 13 an account, and let's start getting everybody to pour into 14 there, and then, when we get to that point, somebody has to 15 go out and hire a lawyer with it to represent the environs 16 of Kerr County. 17 COMMISSIONER WILLIAMS: Still leaves 18 unanswered, I think, part of what you were talking about, 19 Commissioner. Mr. Edwards dealt with that, as I recall. He 20 was talking about whether or not the Court would authorize 21 money for that. But if the other counties -- and this may 22 be better handled in the Judge's cover letter to the other 23 counties than what it says in the resolution, suggesting 24 there's a way to get together -- for us to get together to 25 do more than what we're doing. I don't know. 6-2-04 40 1 COMMISSIONER NICHOLSON: If that would make a 2 difference, I would be interested in pursuing that kind of 3 course of action. 4 COMMISSIONER LETZ: I think one other 5 comment, and this is probably more to Glenda than anybody 6 else. In any article written, we need to remember that 7 there's -- we have a lot of subdivisions and water systems 8 that are not on this list of 40. We need to make sure that 9 we don't exclude them. I know I have, I know, two besides 10 the one that is listed that are -- are not on here. I don't 11 know why. 12 COMMISSIONER WILLIAMS: Are they AquaSource? 13 COMMISSIONER LETZ: Yeah. And -- but 14 they're -- they don't have active homeowners' associations 15 at all. They're just -- you know, it's a subdivision that's 16 platted, and they have a water system that's owned by Aqua 17 Texas. But I think that those people certainly need to be 18 encouraged, and, you know, by the -- reaching them through 19 the press, to do the same. And if they could actually 20 publish the form of this -- the, you know, one little 21 paragraph in the paper that's on this letter, I think that 22 would be real helpful. 23 COMMISSIONER NICHOLSON: The -- I'm thinking 24 again about the T.C.E.Q. hearing. Is -- is it important 25 that ratepayers -- a large number of ratepayers show up? 6-2-04 41 1 And is the T.C.E.Q. influenced by -- by a lot of noise? 2 COMMISSIONER LETZ: I would say -- I've never 3 been to T.C.E.Q., but I do go to a lot of T.W.D.B. board 4 meetings in Austin, and yes, they are. 5 JUDGE TINLEY: That would be my supposition, 6 also. Mr. Eller, you had a comment that you wanted to make? 7 MR. ELLER: I'd like to make a couple of 8 comments. Number -- number one, I like the petition and I 9 like the letter. People are so concerned that you might get 10 10 percent of them to sign a letter and put a stamp on it, 11 put it in an envelope and mail it, right? So, we might get 12 50 or 60 percent to sign this petition if it's put in front 13 of their face. So, I -- you know, we need to go with both 14 of them; certainly need to go with this one. At the town 15 hall meeting, this thing ought to be made up and there ought 16 to be a table with each one of these water companies, so 17 each person can go over and sign. I think we can get a lot 18 of signatures. If these are out at the -- if the letter has 19 "return to" or "c.c." to the Commissioners Court, this one 20 ought to have it too, because people are going to forget 21 where to send it, and -- you know. Okay? And it doesn't 22 cost much ink to put it down there at the bottom. And for 23 the noise in Austin, there's nothing wrong with chartering 24 some buses, and it's so much a head, just like going to 25 Louisiana to gamble. Let people pay 25 bucks, and we'll 6-2-04 42 1 ride some buses up there. Thank you. 2 JUDGE TINLEY: Thank you. Mr. Lambert, you 3 had a comment? 4 MR. LAMBERT: Actually, I had a question as 5 to -- it appears that AquaSource or Aqua Texas has omitted 6 some of the actual water districts. It is "Aqua Texas" 7 you're saying? 8 COMMISSIONER LETZ: I don't know that there's 9 a difference; I think they're the same entity. Just -- 10 MR. LAMBERT: So, everything that once was 11 AquaSource is now absorbed into Aqua Texas, to your 12 knowledge? 13 COMMISSIONER LETZ: As I understand it, yes. 14 MR. LAMBERT: Okay. Was that an omission? 15 Do you suspect that they just left some of those off? 16 COMMISSIONER LETZ: I don't -- I think that 17 the -- the one that I'm thinking of is -- you know, they 18 don't have any kind of an association, so it's not -- even 19 though it's a platted subdivision, there's no body for them 20 to list. 21 MR. LAMBERT: Because somewhere there 22 exists -- 23 COMMISSIONER WILLIAMS: If you look at the 24 heading, Clay, on -- on -- in this booklet -- 25 MR. LAMBERT: Right. 6-2-04 43 1 COMMISSIONER WILLIAMS: -- it identifies 2 who's making the -- filing the petition for rate increases, 3 and the first one is Aqua Utilities, Inc., that does 4 business in Texas as Aqua Texas, in parentheses, "formerly 5 AquaSource Utility," so they've reorganized the whole thing. 6 And then the second petitioner is AquaSource Development 7 Company, doing business as Aqua Texas. So, you know, it's 8 alphabet soup here. 9 MR. LAMBERT: I guess what I'm trying to get 10 to is, do we really have identified, to our knowledge, every 11 subdivision or every water system that's included in there? 12 COMMISSIONER WILLIAMS: We've identified 13 what's in their book. 14 COMMISSIONER LETZ: Right. 15 MR. LAMBERT: What I've heard today is that 16 there's some others that were not included in the book. 17 COMMISSIONER WILLIAMS: I heard it too. 18 MR. LAMBERT: You know, if it's time for a 19 hearing and someone goes in and says, "We've got 12 percent 20 of the customers' signatures," and all of a sudden they say, 21 "Well, no, you don't, because there's these other areas that 22 you didn't look at," there could be an issue there. So, we 23 ought to be shooting for some number of signatures, is what 24 I'm coming around to, to make sure that we exceed that 25 number. 6-2-04 44 1 JUDGE TINLEY: Well, I think you should 2 certainly try and exceed it in any case, get yourself a good 3 cushion. The observation I would make is that if you're 4 going to give fair notice to someone of a rate increase, and 5 -- and you don't include a subdivision as part of that rate 6 increase, I think you might be hard-pressed getting that 7 rate increase to be applicable to something that you haven't 8 identified, because you're not giving those people fair 9 notice. And I -- and I think, under the administrative law 10 process, they very well may have to face that. Now, whether 11 or not they are able to show that, for example, Greenwood 12 Forest is, in fact, included within some other umbrella or 13 some other system, rather than specifically Greenwood Forest 14 Subdivision water supply or whatever, you know, that -- 15 that, of course, is a whole 'nother issue. I'm not sure how 16 they came up with their -- with their designations. But if 17 they've not given fair notice to these people -- Mr. Eller, 18 did everybody in Greenwood Forest get one of those? One of 19 these -- 20 COMMISSIONER WILLIAMS: Look at -- 21 JUDGE TINLEY: -- these booklets that came 22 from T.C.E.Q.? 23 MR. ELLER: I did not. 24 JUDGE TINLEY: Okay. That's very 25 interesting, because that's a significant number of 6-2-04 45 1 customers. 2 COMMISSIONER WILLIAMS: How about -- how 3 about in Pecan Valley, Professor? Did everybody get one? 4 MR. VAN BAVEL: Yeah, everyone that I have 5 talked to. And, for what it's worth, I got a list from 6 Headwaters of all the well permits that have been issued to 7 AquaSource, because they bought a bunch of systems that 8 never did have a permit in the first place, but that's -- 9 that's only 13 districts. And the ones that they bought 10 that had permitted -- properly permitted wells, they have 11 no -- we don't know who they are, because that is somewhere 12 in the files in Austin. But that -- I've always come to the 13 conclusion that the whole registration of wells is a total 14 mess. Nobody knows how many wells there are, where they 15 are, and who owns them. But on those 13, I have not only 16 the location, but also the number of connections and the 17 size of the area. So, somewhere -- but that's only 13 out 18 of 40. Now, I have another idea that I might be using -- 19 that I could use to find out what -- where the others are, 20 but one of them would be doing some kind of publicity in the 21 newspaper that says, you know, hold up your hand where you 22 are a ratepayer and so forth and so on. Give the address. 23 But that is a real problem. 24 JUDGE TINLEY: Thank you. But your point is 25 well-made, Mr. Lambert, that -- that you shouldn't try and 6-2-04 46 1 just reach the target of 10 percent and sit back. You need 2 to exceed it as much as you can. Number one, to have a 3 cushion, and number two, you got to consider that we are 4 looking at what's called a southwest region. 5 COMMISSIONER WILLIAMS: That's what they call 6 it. 7 JUDGE TINLEY: And they're going to calculate 8 that as one entity. So, if -- if, off down in Dimmitt 9 County or some other county that's within that same region, 10 they have a low, low level of participation, we may have to 11 absorb some of their 10 percent, or other counties, and as 12 well as other counties participating also. And that's what 13 we're going to need to try and impress upon the other -- 14 COMMISSIONER BALDWIN: Judge, let me give you 15 an example of that. One of those counties is Bexar County. 16 It would surprise me if the Commissioners Court in Bexar 17 County will participate. I don't know how many water 18 systems Aqua Texas has in Bexar County, but it would 19 surprise me if Bexar County Commissioners Court 20 participated. And the same thing in Corpus Christi; Corpus 21 is also in this area. It would surprise me if that county 22 commissioners court participated in this program. So, we 23 need to hit 100 percent here and hope that the Banderas and 24 the rest of them will help carry the load a little bit, 25 'cause I don't think that those two -- what about Hays 6-2-04 47 1 County? You know, they're pretty big. 2 COMMISSIONER LETZ: Travis. 3 COMMISSIONER WILLIAMS: In that connection, 4 Commissioner, you and I talked. I will take this same 5 resolution that we adopted to the Rural County Judges 6 meeting, which is in advance of the next AACOG Board 7 meeting, and ask the rural county judges to adopt it as -- 8 as their own as well. So, we'll try to cover our bases that 9 way. 10 MR. LAMBERT: I had one other question. 11 JUDGE TINLEY: Yes, sir? 12 MR. LAMBERT: Is there a readily available 13 list of homeowners -- or identification of homeowners 14 associations for each of these water systems? How can that 15 best be put together? 16 COMMISSIONER WILLIAMS: Let me try to deflect 17 your question, 'cause Kathy did the research. When you did 18 the research on the list that's contained in this booklet, 19 which is a two-page list, did we finally agree that all of 20 them are homeowners' associations, or some of them are not? 21 MS. MITCHELL: Some of them are not. 22 COMMISSIONER WILLIAMS: Okay, I thought that 23 was the case. And they're just identified as little water 24 companies out someplace. Pine Grove or something, for 25 example. I don't know. 6-2-04 48 1 MR. LAMBERT: Well, if you have the list, if 2 you'd share that with me -- 3 COMMISSIONER WILLIAMS: It's in the book. 4 MR. LAMBERT: -- I'd take the responsibility 5 of contacting the homeowners' associations listed. 6 COMMISSIONER WILLIAMS: No, what we have is 7 in this book, the list of water companies that are applying 8 for a rate increase. There's two pages of them; a bunch of 9 them, water and sewer. There are two pages here of those 10 who are identified throughout the southwest region, and we 11 went down and checked all the Kerr County ones. Now, this 12 takes care of all of them, all of the 14 counties. 13 MR. LAMBERT: I understand that, 14 Commissioner, but what I wanted to do is to mate up 15 homeowners' associations with those that have them. 16 COMMISSIONER WILLIAMS: I understand that, 17 but I don't know that we have that information. 18 MS. MITCHELL: No. 19 MR. LAMBERT: I'm sorry. I thought you said 20 that we -- 21 MS. MITCHELL: We don't have the homeowners. 22 MR. LAMBERT: My question is, where could 23 that best be found? 24 COMMISSIONER WILLIAMS: That'd be good, if 25 you want to do it. 6-2-04 49 1 MR. LAMBERT: Where would I go to? 2 MS. PIEPER: Most homeowners' associations 3 are not filed for record; therefore, there is no record of 4 such. 5 COMMISSIONER LETZ: You almost have to find 6 someone in a subdivision. Now, the one in my precinct, I 7 can tell you exactly who to contact, which is Falling 8 Waters. 9 COMMISSIONER BALDWIN: And the same here. 10 COMMISSIONER LETZ: I mean -- 11 COMMISSIONER BALDWIN: I have -- I mean -- 12 COMMISSIONER LETZ: I think probably the, you 13 know, Commissioners -- we probably know as much as anyone, 14 you know, for our area, as to who the best contact is in 15 each of these subdivisions, but there's no master list of 16 the associations. 17 MR. LAMBERT: Okay. 18 COMMISSIONER LETZ: Actually two in my 19 precinct. 20 MR. LAMBERT: So, did I hear that you're 21 going to take that on? 22 COMMISSIONER LETZ: I already talked to them. 23 MR. LAMBERT: You have? 24 COMMISSIONER LETZ: I haven't told them about 25 the public hearing or the public meeting -- Town Hall 6-2-04 50 1 meeting, whatever, but we didn't know the day. They met 2 last night in Falling Water. 3 MR. LAMBERT: And, Commissioner Baldwin, do 4 you think you could attach a name or a homeowners' 5 association or something to each of these different systems 6 in Precinct 1? 7 COMMISSIONER BALDWIN: I don't know about 8 100 percent of them, but most of them, yes, absolutely. 9 MR. LAMBERT: Well, if you can get me that 10 list, I'll take -- or I'll assist you in contacting people 11 to -- 12 COMMISSIONER BALDWIN: Did you get that down, 13 Kathy? I'll take care of you. 14 MR. BRADY: Would it be applicable or proper 15 for someone to ask AquaSource -- you know, they have a 16 database with all these customers in it, and they can sort 17 it any way. It seems like I heard somewhere that there's 18 1,200 customers in the county. I don't know about that, but 19 I heard that. But I know that none of us could call 20 AquaSource and ask them for a sorted list of the customers 21 in Kerr County. Could the County Judge do that? 22 JUDGE TINLEY: Good point. 23 MR. BRADY: Under the Freedom of Information 24 Act? 25 JUDGE TINLEY: The worst they can do is say 6-2-04 51 1 no, right? 2 MR. BRADY: That's right. That's how I view 3 the thing. 4 JUDGE TINLEY: I think I've got the telephone 5 number to the head honcho in Texas. 6 COMMISSIONER BALDWIN: I think you do too, 7 sir. 8 COMMISSIONER WILLIAMS: Pflugerville. 9 COMMISSIONER NICHOLSON: I don't think 10 they're covered by Open Records Act. That's just a 11 government entity. 12 COMMISSIONER LETZ: Utility. 13 COMMISSIONER WILLIAMS: Not a corporation. 14 MR. BRADY: I'm sure they can shuck and jive 15 for you too, but certainly, you have a lot more weight than 16 any of us. 17 COMMISSIONER BALDWIN: I don't know if -- 18 JUDGE TINLEY: We're fixing to find out just 19 how much weight they perceive I have. 20 COMMISSIONER BALDWIN: The Judge and I met 21 with the president of the company in private one day, and 22 I'm not sure if the guy's going to respond back to the 23 County Judge or not. It wasn't a pleasant experience. 24 MR. BRADY: I have heard that about the 25 gentleman. 6-2-04 52 1 COMMISSIONER BALDWIN: About this gentleman? 2 MR. BRADY: No, the one that you talked with 3 up there. 4 COMMISSIONER BALDWIN: Oh, he was very nice. 5 This one here was a little bit rough, though. 6 MR. BRADY: Oh, okay. 7 COMMISSIONER BALDWIN: I want to point out 8 this -- talk again about this Number 3 item, that we're 9 going to have a town hall meeting. Where? 10 COMMISSIONER WILLIAMS: Hill Country Youth 11 Exhibit Center. 12 COMMISSIONER BALDWIN: Very good, Bill. On 13 June the 14th at 7 p.m. I think that's important, that 14 everybody get that down and start -- when you go -- when you 15 talk to -- go back and talk to these subdivisions, let them 16 know this date. They need to be there. It's important. 17 COMMISSIONER WILLIAMS: And I will follow up 18 on your suggestion. We'll make the letter available so they 19 can just pick it up, take the word "draft" off the top, and 20 whatever adjustments -- and the petition as well. They can 21 sign that there, and maybe we can find out who will 22 represent the various water companies and give them some 23 extra copies to take with them. 24 MR. ELLER: If we want a large crowd out 25 there June 14th in Kerr County, what kind of barbecue and 6-2-04 53 1 beer are you serving? 2 COMMISSIONER BALDWIN: Hot Pearl. 3 COMMISSIONER LETZ: Whatever the homeowners' 4 associations can contribute. 5 MR. BRADY: Good answer. 6 MR. ELLER: Free food will draw a crowd. 7 COMMISSIONER WILLIAMS: Judge, I would move 8 our strategy to assist Kerr County constituents' protest of 9 AquaSource proposed tax rate increases. 10 COMMISSIONER LETZ: Second. 11 JUDGE TINLEY: Motion made and seconded to 12 adopt the strategy to assist Kerr County constituents' 13 protest of the proposed rate increases by Aqua Texas. Any 14 further question or discussion? All in favor of the motion, 15 signify by raising your right hand. 16 (The motion carried by unanimous vote.) 17 JUDGE TINLEY: All opposed, same sign. 18 (No response.) 19 JUDGE TINLEY: Motion does carry. Do we have 20 any other business to take up under these two agenda items? 21 Seeing none being raised, I'll declare the meeting 22 adjourned. 23 (Commissioners Court adjourned at 10:25 a.m.) 24 - - - - - - - - - - 25 6-2-04 54 1 STATE OF TEXAS | 2 COUNTY OF KERR | 3 The above and foregoing is a true and complete 4 transcription of my stenotype notes taken in my capacity as 5 County Clerk of the Commissioners Court of Kerr County, 6 Texas, at the time and place heretofore set forth. 7 DATED at Kerrville, Texas, this 4th day of June, 2004. 8 9 10 JANNETT PIEPER, Kerr County Clerk 11 BY: _________________________________ Kathy Banik, Deputy County Clerk 12 Certified Shorthand Reporter 13 14 15 16 17 18 19 20 21 22 23 24 25 6-2-04