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Michele Gangnes’ Comments to San Antonio Water System


Prepared by Michele G. Gangnes Resident Landowner, Lee County and Licensed Attorney Founding Board Member, League of Independent Voters of Texas Vice President, Neighbors for Neighbors

(September 29, 2014)

My name is Michele Gangnes. I own land and groundwater in Lee County, and I have been a water activist since the day after SAWS signed the Alcoa water contract on New Year’s Eve, 1998.

I am a founding board member of the League of Independent Voters of Texas, I am a licensed attorney, and I have practiced law with a specialty in municipal and corporate finance for about 32 years of my 36-year law practice in the Pacific Northwest. I do not serve as legal counsel to the League, and I’m no expert on Texas public finance, but I have been eligible for inclusion in the so-called “Red Book” of public finance counsel since 1987.

I also devoted some time to reading this contract. I share Ms. McFaddin’s concerns and would amplify them on the subject of take or pay contracts. My ex-husband devoted about 8 or 9 years of his life as a securities fraud litigator to unwinding the multiple take or pay contracts that were directly responsible for the famed multi-billion dollar Washington Public Power Supply (aptly named “WPPS”) default. Those contracts were hastily signed, too.

Take or pay may be Abengoa’s favorite contract, but why did SAWS expose its ratepayers to paying for more water than they need? SAWS obviously had the superior negotiating position in this contract. The City of Hutto was recently advised to raise water rates by 20% in one year to accommodate a take or pay water supply without enough customers. I can only conclude you have become part of the municipal gravy train of special interests that feed off of growth in places without water of their own.

Someone said to me last night, “There is nothing creative about what SAWS is doing in bringing water to lure in growth — they are failing to realize they look just like Los Angeles all those years ago.”

Your take or pay contract with our water is an insult to rural Texans — you are already looking to offload excess water, and you are using our water to do it. You will have joined the ranks of Central Texas water speculators.

Instead of telling ratepayers you are risking their water bill, you say you have minimized or even eliminated their risk in this contract. And then you show them an impressive slide about “re-delivering” $2300/acre-foot water to others through an ERCOT-style, Trans-Texas style water pipeline running up and down IH-35. Good luck with that. But I suppose any number of water speculators and special interests will help you do it.

Do you realize that your paltry 3% of the population who are selling you water in 1 million acre Burleson and Milam counties don’t even begin to counter the resentment in our counties toward San Antonio — for the second time in 15 years? (And by the way, Alcoa closed its doors and left just like we told you they would.) You put yourselves, the enrichment of water speculators, your aquifer and your urban sprawl ahead of people who choose to live differently than you do but need and deserve water for their future generations as much as you do.

Do you realize that right across the ”street” as far as the aquifer is concerned, water marketers want at least 75,000 acre-feet from Lee County and another 16,000 from Bastrop County to compete in your “take or pay” market along IH-35? Or are you planning to help your competitors develop their markets with your short-term water?

And did you know that concerns about potential contamination of our precious Carrizo-Wilcox Aquifer from the fracking uptick in Burleson County are apparently leading the Post Oak Savannah Groundwater Conservation District to institute a water quality monitoring system for the aquifer. That’s a water treatment issue for you to consider!

Don’t take more than you need —- don’t rush into a contract whose upside to San Antonio is certainly not clear if you don’t have time to read it. And shame on you if you do vote on it without reading it, carefully.

Thank you for allowing the League of Independent Voters to make public comment on behalf of its statewide membership.


Michele G. Gangnes


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