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SAWS Deal a Trans-Texas Water Highway!

For Immediate Release: September 30, 2014

Is it a take AND pay water “deal”, a Trans-Texas Water Highway or both? 

San Antonio Water System’s unanimous vote yesterday to rush a $3.4 billion deal for a 142-mile water pipeline from Burleson County, began hitting a few road blocks when two public finance attorneys showed up in opposition to the project. SAWS Chair Berto Guerra delivered a 15-minute monologue extolling the virtues of SAWS’  Vista Ridge “deal of the century”, but then reduced public comment from the standard five minutes to two minutes because there were “so many” speakers. There were nine.

Michele McFaddin is an environmental/natural resources attorney with more than 27 years of experience and was the former lead attorney for infrastructure loan programs at the Texas Water Development Board between 2007 and 2013. McFaddin now represents the League of Independent Voters, which has been fighting a virtual siege of private water marketers on the slow-recharge aquifers east of Austin. McFaddin said today, “SAWS has indicated that Abengoa-Vista Ridge accepts the regulatory risk of making 50,000 acre-feet of groundwater available but has neglected to mention that it has pay for the water AND reimburse Abengoa for its financing, design, construction, treatment and operational costs. Allowing a foreign company to finance, build and operate this project rather than financing and implementing this project itself does not benefit SAWS or San Antonio ratepayers if (1) Abengoa does not possess an investment grade rating for purposes of financing (unlike SAWS which has an excellent investment rating); (2) is in questionable and deteriorating financial condition according to its own regulatory filings with the SEC; and (3) will be implementing this project through a subsidiary that is a Delaware-based limited liability company. This project is a clear example of a public/private partnership gone awry.”

Michele Gangnes, a founding board member of the League of Independent Voters and a Lee County landowner who lives over the Simsboro, also has 32-years’ experience as a public finance attorney. After hearing Interim San Antonio Mayor and SAWS Board member, Ivey Taylor, ask serious follow-up questions, Gangnes said, “Mayor Taylor seems open to hearing our concerns. She gave us hope she will call a full public hearing to do just that. Shifting the risks of a firm water supply to Abengoa and Blue Water but also promising to buy 50,000 acre-feet of very expensive water whether San Antonio needs it or not has consequences. San Antonio ratepayers could be put at serious risk of both uncertain supply and unaffordable rate increases if the San Antonio City Council fails to opt for lower interest rates by either financing the project on its own or with state assistance. Better yet, if the economic and environmental sustainability of the project is as questionable as the undertones San Antonio citizens are hearing, the city should abandon the project altogether and focus on desalination and other strategies.”

Linda Curtis, Executive Director of the League and longtime independent activist known for bringing together environmentalists with tea party Republicans, said, “Not long after a united citizens movement across partisan lines successfully stopped the Trans-Texas Corridor, we started calling plans to pipe large exports of water from the Simsboro the ‘Trans-Texas Water Highway’. Little did we know that today we would be fighting Abengoa, yet another Spanish company that, just like CINTRA, is being met with open arms by local power brokers who operate just like Governor Rick Perry. Let’s hope this project – as it stands today – meets the same fate.”

Media is invited to reach the 5-minute comments offered to SAWS in writing from McFaddin posted here and Gangnes posted here.

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