SRBA board tables action with firm regarding bond proposals

MOUNT PLEASANT, TEXAS— The Sulphur River Basin Authority’s Board of Directors tabled approval of an engagement letter with McCall, Parkhurst & Horton, LLP for future bond proposals during its regular meeting Thursday.

Directors heard a presentation from Rudy Segura Jr., an attorney with the firm that represents river authorities and water districts statewide, including the Northeast Texas Municipal Water District. They also represent the five water districts in the Joint Commission for Program Development, which funds SRBA.

Segura said his firm were one of the oldest and most experienced in the state, as they were founded 99 years ago and helped draft some of Texas’ earliest water laws.

“I was contacted by (SRBA Attorney) Tim Brown and asked to take a look at your special act and see if there needed to be clarification on your bonding powers with the understanding that the authority is interested in the construction of a new reservoir, a portion of which would be potentially outside the basin,” Segura told the board. “You can construct a reservoir and you can sell water outside the basin. To be clear, you can only do so if if provides a benefit to the Sulphur River Basin, which is the reason SRBA was created.”

He went on to explain the details of project bonding, which also has to be approved by the Texas Attorney General.

Board Member Bret McCoy then asked, “Who told you that this board was for a reservoir?”

Segura did not answer that question directly, but said the bonds could be used for a reservoir or other projects the board wanted to pursue.

“I don’t know that this board is on record for supporting a reservoir,” Chairman Chris Spencer said. “It’s always a possibility in the future.”

McCoy then said, “This board member member isn’t (in support.)”

Following the meeting, Spencer said he had not discussed any projects with Segura and that the attorney may have been looking at projects SRBA had been considering in previous years.

“I have never discussed a project with Rudy at all,” Spencer said. “SRBA has no project in mind for a bond at this time. None whatsoever. However, I do hope that we are able to solidify that we do have bonding authority and if not, initiate enabling legislation to where we have that authority.”

Segura also recommended additional legislation for the enabling act to ensure said authority.

“At first glance, it looked like you had all the powers,” he told the board. “At the end of the day, it could use some clarification. With respect to bonding, the powers are about as broad as any other river authority. You can bond for any purpose.”

Construction of the proposed Marvin Nichols reservoir in the upper Sulphur River Basin has long been a point of contention with landowners and basin stakeholders, who have been against it. The 72,000-acre project is included in the 2017 Texas State Water Plan, but is not recommended for completion until the decade of 2070. It will be re-examined in the next round of the state water planning.

The issue was tabled after Board Member Kelly Mitchell asked if SRBA contracting with the firm to purchase bonds for projects was in conflict with their contract with JCPD. Segura said he would also look at the contract. Spencer they said they would revisit the issue in January.

In other business, the board heard an update on the final Sunset Advisory Commission Management Action Report.

In 2016, the Texas Sunset Advisory Committee reviewed SRBA and its management practices. The agency’s report stated the organization lacked transparency with stakeholders, the public and the media. It also recommended hiring an executive director, the development of a strategic plan and board training. HB 2180, passed during the last session of the Texas Legislature, mandated these changes for the river authority, which was created in 1985 to preserve and develop the resources in the Sulphur River Basin. Although it was created by the state, it was not given a funding source. Seeking additional funding other than JCPD is also required through the legislation.

The board has worked to achieve these goals and the final report reflects this and states that the majority of the directives have been fully implemented.

“The report that all of you got a copy of in the first of December is approved except the hiring of an executive director and you’re still working on getting funding after you hire an executive director,” SRBA Administrator Nancy Rose told the board. “And the third item you still have to do after the executive director is hired, the board and the executive director will have to decide the separation of duties because they said the board is not usually involved in the day-to-day duties of the office of the executive director. You will have to adopt a policy on what the board is involved in, what the executive director is involved in and what the staff is involved in.”

Two candidates are being considered for the executive director position, which Spencer said he hopes will be filled before the beginning of the year so they can work together to implement the strategic plan.

Rose said the final Sunset report will be posted on the authority’s website, srbatx.org.