Quality on Tap - The Special Legislative Issue by Texas Rural Water Association

QUALITY ON TAP!

Special Legislative Issue 2013

A New Day for Rural Water Funding in Texas Also Inside:

WSC Election Law Provides Fix to Petition Requirement, Uncontested Elections Fireflow Bills Took Center Stage this Legislative Session Water Districts and the 83rd Legislature: How Will You Be Affected? www.trwa.org

TRWA Today TRWA BOARD OF DIRECTORS

TRWA STAFF

Officers James Morrison Clay Hodges Pat Allen Tommy Carswell Scott Adams

President Huntsville (At-Large) Vice President Greenville (Dist. 7) Treasurer Marion (Dist. 5) Secretary Lufkin (Dist. 14) Immediate Past President Ft. Davis (Dist. 2)

District Directors John Frantz Chris Boyd Michael Taylor Brian Macmanus Charles Beseda Vacant Barry Miller Kevin Spence Roy Perkins Bill Goheen Kent Watson

Hartley (Dist. 1) Aubrey (Dist. 3) Brownwood (Dist. 4) Harlingen (Dist. 6) Penelope (Dist. 8) District 9 Gonzales (Dist. 10) Franklin (Dist. 11) Kaufman (Dist. 12) Mabank (Dist. 13) Bryan (Dist. 15)

At-Large Directors Kent Smith Vacant

Itasca At-Large

Established in 1969, the Texas Rural Water Association (TRWA) is a statewide nonprofit trade association with an active membership consisting of more than 750 municipal utility districts, special utility districts, nonprofit water supply corporations, small-town water departments, investor-owned utilities and individual members. In addition, more than 200 water industry suppliers participate in TRWA activities as associate members. TRWA members provide water and wastewater service to 2.5 million customers throughout Texas. TRWA is dedicated to helping directors, managers and operators provide efficient service and clean, safe drinking water to their customers. Through on-site technical assistance, education and information exchange, TRWA helps its members better meet their needs as well as the needs of their customers. 2

Quality on Tap! - Special Legislative Issue 2013

Fred Aus Executive Director Allison Kaminsky Communications Director Celia Eaves Environmental Services Director Refugio Rodriguez FMT Specialist Deborah McMullan Source Water Protection Specialist Janice Gibbs, CPA Finance Director Pam Cantrell Administrative Assistant Angela Harris Administrative Assistant Lara Zent Deputy Executive Director and General Counsel Pauline Word Legal Assistant Nickie Morgan, CMP Member Services Director Lance Harrell Information Technology Michael Vollmar Professional Development and Training Director Melody Bennett Administrative Assistant Len Klandrud Instructor George Patterson Instructor Dian Phinny Instructor Larry Bell Raymond Curtis Alex Eaves Paul King Steven Mindt

Technical Assistance Director Wastewater Trainer Wastewater Technician Circuit Rider Technical Assistance and Training Specialist James Smith Circuit Rider William White Circuit Rider

Quality On Tap! 8

Features:

WSC Election Law Provides Fix to Petition Requirement, Uncontested Elections By Pauline Word, Texas Rural Water Association Due to TRWA’s efforts, the 83rd Legislature has fixed many WSC election procedure issues with the passing of SB 447.

In Every Issue: Letter from the Executive Director Ask Larry

Answers to your technical questions

Keep it Legal

TRWA staff assisted Crystal Clear WSC in legal proceedings with TCEQ regarding a streamlined expedited release decertification petition.

5 10

Advertiser Index

Plan Ahead

TRWA’s Calendar of Events

A New Day for Rural Water Funding in Texas By Fred Aus, Texas Rural Water Association Funding the State Water Plan was high priority this legislative session. Learn more about the legislation passed that could provide up to $2 billion in funding.

Answers to your legal questions

Crystal Clear WSC Issues Resolution of Appreciation to TRWA

Fireflow Bills Took Center Stage this Legislative Session By Pauline Word and Lara Zent, Texas Rural Water Association TRWA worked with stakeholders to ease HB 1973 restrictions for members.

Sunset Bills Result in Rate and CCN Jurisdictional Transfer to the Public Utility Commission By Allison Kaminsky, Texas Rural Water Association The 83rd Legislature has passed legislation that will transfer water and sewer rate and CCN programs from TCEQ to PUC.

Water Districts and the 83rd Legislature: How Will You Be Affected? By Lara Zent, Texas Rural Water Association Learn about the bills passed by the Legislature this session that affect water districts.

25 ON

THE

COVER: Texas Capitol Grounds

TRWA Briefs See what’s new with the Texas Rural Water Foundation; the TRWA Legislative, Legal and PAC Committee gets a new Chairman; Update your TRWA contacts list. Quality on Tap! - Special Legislative Issue 2013

Quality on Tap! - Special Legislative Issue 2013

Letter from the Executive Director Back to School—Again! September is already here, and that means that our children and grandchildren are already back in school. And I have spent a good portion of the summer on my own continuing education, which has included both structured and impromptu learning situations. TRWA co-hosted a Drought Workshop in Abilene in early August with the Texas Water Infrastructure Coordination Council. Nearly 100 people from the region came to learn more about drought response and water conservation efforts, as well as find out about resources available to them from TRWA and various state and federal agencies. At TRWA’s invitation, State Sen. Troy Fraser, Chairman of the Senate Natural Resources Committee, talked about the importance of water to the state’s economy and the need to develop water infrastructure projects that benefit rural Texas. We also co-hosted a similar workshop in the Rio Grande Valley and assisted TCEQ with its drought workshop in Fort Worth in July. Meanwhile, TRWA staff received a really nice compliment recently—from a TRWA member who told me how much they appreciate our efforts “to keep the members of TRWA armed with the most current information we need to keep us in compliance with TCEQ.” I am proud of the work that TRWA staff does to make all of our education, training and outreach timely and relevant. They are always seeking ways to improve, and we appreciate any and all input you provide us. In this issue of Quality on Tap, you will read in-depth articles on key pieces of legislation that TRWA dealt with during the recent legislative session. But your opportunities to learn about them do not just end with this magazine, nor will our efforts to work on these issues on your behalf. Please register for the TRWA 2013 Fall Management Conference which will be held in San Antonio on October 8-9 and in Dallas on November 6-7. Also, this year the TRWA 2013 Water Districts’ Conference will be held in Dallas on November 6-7 in conjunction with the Fall Management Conference. Learn more about elections law updates, water infrastructure funding and financing, fireflows, drought and many other important topics. We’ll have plenty of time there to answer your questions and talk with you about how we are advocating for you as these new laws start to be implemented.

“Learn and grow with us as we work together to fight for the issues important to Texas Rural Water!”

Learn and grow with us as we work together to fight for the issues important to Texas Rural Water! On another note, please remember to send in your completed 2013 Salary Survey. The deadline to participate is September 20th, and your response matters! The more responses we get, the more accurate the information will be in our published reports. Results will be available this fall.

Fred Aus Executive Director Texas Rural Water Association Quality on Tap! - Special Legislative Issue 2013

WSC Election Law Provides Fix to Petition Requirement, Uncontested Elections By Pauline Word, Texas Rural Water Association Our water supply corporation only has one candidate running for one position. Do we still have to hold the election by mailing all the ballots? This will be very costly. Our WSC is very rural with great distances between member properties. It is totally impractical for Board of Director candidates to go door-to-door collecting signatures on petitions just to run for office. We already have trouble getting people to run. Must we comply with this requirement?

f these questions sound familiar, you are not alone. The Texas Rural Water Association fielded hundreds of these types of calls from member water supply corporations (WSCs) when the 82nd Texas Legislature passed the new WSC election law in 2011. But the good news is, due to TRWA’s efforts, the 83rd Legislature has fixed many of these issues by passing Senate Bill 447, which the governor signed into law in June and became effective August 1. In 2011, the Legislature passed Sen. Troy Fraser’s SB 333, which imposed specific procedures on WSCs to allow for a more open election process. Rep. Tracy King was the House sponsor. This year Sen. Fraser again carried the WSC election bill as SB 447 in response to concerns regarding SB 333. Rep. King was the House sponsor of the bill again this year. The new law made two very positive and important changes to the election provisions under Chapter 67 of the Texas Water Code. The first is WSCs now will be able to cancel elections when candidates for the board of directors are unopposed. This fix to the 2011 law now provides WSCs with similar authority to that of water districts, cities and other political subdivisions under the Election Code to cancel uncontested elections. Many WSCs complained to TRWA about the expense of having to produce and mail ballots to all their members when the candidates were unopposed, 6

Quality on Tap! - Special Legislative Issue 2013

especially when few members even vote in the election or attend the annual meeting. The new law describes the process for WSCs to cancel an uncontested election. Once the WSC determines after the candidate nominee deadline that positions are unopposed, the WSC board must certify in writing that the candidate(s) are unopposed and pass a resolution declaring the candidate(s) elected. The WSC must post the resolution at the corporation main office and read it into the record at the annual meeting. The law only allows cancellation of the election if the candidates are unopposed. If other candidates are opposed or other ballot measures are under consideration the election must be held for these other measures. The requirement in Texas Water Code Section 67.007 to hold an annual meeting also still applies. “This is going to help a lot of systems out; not just those as small as ours. If we have two open positions and two people running, it just seems so unnecessary to do all of that extra work to hold an election,” said Suzanne Bishop, President of Bloomburg WSC. “It is going to save us so much on cost and workload—I’m so glad to hear about this change.” TRWA has revised its sample WSC annual meeting and election procedures to incorporate changes in the law and describe steps to take for cancelling an election with unopposed candidates. The procedures were made available on Sept. 1 in time for systems to update their procedures for the spring election cycle. The second major change in the law is that the petition requirement for director nominees to collect signatures now only applies to WSCs with 1,500 or more connections. TRWA has determined that only about 70 member WSCs now will be subject to this requirement. The 2011 law required all director candidates

to submit signatures from members of the WSC affirming their support that the candidate’s name be placed on the ballot. WSCs with more than 400 connections required 20 signatures and WSCs with less than 400 connections needed signatures from 5 percent of the members. This requirement proved overly burdensome for many systems and had the unintended effect of discouraging some candidates from running. After enactment of the 2011 law, one WSC board member told TRWA: “We have a difficult time getting people to fill out a nomination form to even run for a director’s position. There is no way anyone will ever try to be on the board if they have to have 20 other members’ signatures! I have served on the Board for almost 12 years—it seems that once you are on the Board, you cannot get off because there is no one to replace you!” The petition requirement was not as much of a hardship for larger WSCs where it is not as cumbersome to solicit 20 signatures. Many larger WSCs support the petition requirement because their boards feel it shows a stronger commitment to service from the candidates. “Several large system managers I spoke with see the petition requirement and associated signatures as a means to legitimize someone’s interest in serving on the Board of Directors,” said Brian Macmanus, General Manager of East Rio Hondo WSC. “The petition provides somewhat of a primary election process, shows that the membership supports the individual’s candidacy and helps narrow the field of candidates to those truly interested in the position.” “We were in support of the legislation going through and downsizing that requirement in the smaller systems; however, I really feel that in the larger systems, getting those signatures is important. Your customers are diverse and if you want to be a good board member and really care about your system, you need to go to other parts of your district and let people know what’s going on,” said Steven Sanchez, General Manager of North Alamo WSC. “Sometimes it’s hard to get the signatures, but the organization needs the board member who is willing to go the extra mile and find out what the customers want and need.” SB 447 also includes other amendments to

SB 447 WSC ELECTION LAW HIGHLIGHTS • Allows a WSC to cancel an uncontested election • Removes the requirement to obtain member signatures to run for a director position if the water system has fewer than 1,500 members • Clarifies that the new election procedures apply to retail WSCs, not to wholesale WSCs • Must notify members of opportunity to run for board 75 days before the election; TRWA already recommended this in the 2011 sample procedures

the law. It requires WSCs to notify all members of the opportunity to run for director at least 30 days before the 45-day deadline to submit nomination materials, so 75 days before the date of the election. The TRWA sample annual meeting and election procedures already included this suggested provision after the 2011 law passed, so this new requirement in the law will not be a change for systems that already follow the TRWA model. The law does not require how this notice must be provided. Systems may include this notice as a line item or flier in the water bill, post notice on their website or Facebook page, send e-mails, post notice at the office, etc. The law requires WSCs to make available director candidate application forms at the corporation’s main office or electronically, on request. SB 447 also clarifies that the WSC election procedures in Chapter 67 of the Water Code only apply to retail WSCs. A few WSCs were created by groups of retail providers to jointly invest in wholesale water supply projects. Their boards consist of representatives appointed by each retail system. SB 447 clarifies in Chapter 67 that these entities’ director elections are subject to provisions in Chapter 22 of the Texas Business Organizations Code. If you have any questions about this article, you may contact us at (512) 472-8591 or at legal@trwa.org. Quality on Tap! - Special Legislative Issue 2013

Crystal Clear WSC Issues Resolution of Appreciation to TRWA

ecently, Crystal Clear Water Supply Corporation issued a resolution of appreciation to the Texas Rural Water Association for our support and assistance to the system in its efforts to protect and preserve its service area. TRWA Executive Director Fred Aus and Deputy Executive Director and General Counsel Lara Zent assisted the system in legal proceedings with the Texas Commission on Environmental Quality (TCEQ) regarding a streamlined expedited release decertification (SER) petition by the Texas General Land Office (GLO) filed pursuant to the law passed by the 2011 Legislature (Texas Water Code Section 13.254(a-5)). TCEQ granted GLO’s petition and Crystal Clear appealed that decision to state district court arguing that TCEQ erred in granting the petition because Crystal Clear was providing “service” to the property as defined in Chapter 13 of the Water Code. Zent attended the hearing to listen to the arguments. The Assistant Attorney General representing TCEQ argued that the definition of “service” in Chapter 13 does not apply to SER petitions and that the plain or ordinary meaning of “service,” that you can turn on the faucet, applies to these petitions. TRWA had previously filed comments to TCEQ’s rule package implementing the changes in the law made by Section 13.254(a5). In those comments, we requested that TCEQ clarify in the rules that the definition of “service” in Chapter 13 applies to SER petitions. In response, TCEQ stated that clarification was not required because the definition applies to the entirety of the chapter, including the new law. Zent pointed out the inconsistency between TCEQ’s response to TRWA’s comments and the Assistant Attorney General’s argument to the legal team representing Crystal Clear. They submitted follow up briefs to the court highlighting to the judge this inconsistency. 8

Quality on Tap! - Special Legislative Issue 2013

TRWA Deputy Executive Director Lara Zent and Executive Director Fred Aus accept a letter and resolution of appreciation from the Crystal Clear WSC Board and staff.

The judge ruled in Crystal Clear’s favor, overturning TCEQ’s decertification of their CCN area. Crystal Clear’s General Manager and Board Members believed this information was instrumental in winning their case. “Your activity and pro-active approach has really opened our board’s and others’ eyes as to the role and value of the Texas Rural Water Association,” said Mike Taylor, General Manager of Crystal Clear WSC. The Texas Rural Water Association staff cherishes this gesture from Crystal Clear WSC’s Board of Directors and staff. We will continue to work tirelessly to protect the interests of our members and pursue our mission of helping water and wastewater systems provide efficient service and clean, safe drinking water to their customers. “TRWA has worked hard to stay abreast of SER issues by commenting on the rule package, tracking all the petitions filed, notifying our members if a petition has been

filed against them, providing sample responses and pleadings to those members seeking to fight a petition, and providing other assistance as needed,” said Zent. “It’s great to see when these efforts pay off. We’re building a case that we plan to present to legislators about how this law is fraught with unintended consequences.” The entire resolution is published below. Resolution of Appreciation and Gratitude to Lara Zent, Fred Aus and the Texas Rural Water Association for their Suppor t and Assistance to Cr ystal Clear WSC in its Effor ts to Protect and Preser ve Its Ser vice Area WHEREAS, Lara Zent, Fred Aus and the members of the Texas Rural Water Association have worked tirelessly on behalf of Crystal Clear and the other members of the Association to protect and preserve the integrity of the member’s service areas. WHEREAS, through their efforts in working with the Texas State Legislators and the Texas Commission on Environmental Quality, they have fought for the rights of Crystal Clear and the other members of the association to serve the needs of their individual rural service areas.

Environmental Quality rulings and her subsequently providing timely information regarding these rulings to Crystal Clear enabled Crystal Clear to wholly preserve the integrity of its service area, and, subsequently to establish a benchmark for other members of the TRWA in their efforts to defend their service area. BE IT RESOLVED, that the Board of Directors of Crystal Clear Water Supply Corporation publically commends, thanks and expresses its deep appreciation to Lara Zent, Fred Aus and the members of the Texas Rural Water Association for these ongoing efforts and their steadfast vision in protecting and preserving the opportunity of the members to better serve their community. FURTHER RESOLVED, that a copy of this resolution be posted on the District’s website and submitted to all local newspapers and media outlets. Dated in the State of Texas on June 20th, 2013.

WHEREAS, through their diligence and keen insight in pursuit of supporting Crystal Clear and other Association Members, Lara Zent, Fred Aus and the TRWA have been instrumental in assisting Crystal Clear in the maintenance of its service area. WHEREAS, Lara Zent’s continuing close observation of the Texas Commission on

Quality on Tap! - Special Legislative Issue 2013

Ask Larry A Q&A column with TRWA Technical Assistance Director Larry Bell

A member of our WSC has two water meters on his property. I was told the second meter was installed when a relative lived in a trailer on the far end of the property, but the meter has not been used for many years. The member wants to know if a neighbor can hook up to the meter and if so, under what circumstances. Would a hose running across the potential user’s property, across the alleyway and across about 10 feet of the member’s property be allowed? The member knows that “resale” of the water for a profit is not allowed. To your knowledge, are there any parts of the tariff that would prohibit the member from entering into such an agreement or any part of the regulations that would prohibit such an agreement or jeopardize the system’s compliance?

There also is a section in the Service Application and Agreement form RUS-TX Bulletin 1780-9 (01/09) that states: “All water shall be metered by meters to be furnished and installed by the Corporation. The meter and/or wastewater connection is for the sole use of the Member or customer and is to provide service to only one (1) dwelling or one (1) business. Extension of pipe(s) to transfer utility service from one property to another, to share, resell, or submeter water to any other persons, dwellings, businesses, or property, etc., is prohibited.” Texas Water Code Sec. 67.016(d) provides that a corporation may make water or sewer service conditional on ownership of the real estate “designated to receive service and from which the membership or other right of participation arises.” Subsection (e) authorizes a corporation to cancel a person’s membership if he fails to meet a condition of service prescribed by the corporation. TCEQ rules also support that customers/members of a WSC are only qualified to receive service when they have complied with the written provisions included in the WSC’s tariff.

“No new member can be required to pay a previous owner’s bad debt before establishing service.”

A: The TRWA Sample Tariff Section E states requested service can only be established on the real estate designated to receive service and such service shall be through “a meter or sewer tap located on that designated real estate unless otherwise approved by the board.” The sample tariff requires a person to be a member to receive service and a member must be the owner of the property. This is referred to in Section C under the definition of “member” and “proof of ownership,” and again in Section E under Rules and Regulations. Both of these sections clearly state that an owner of the property to be served is the only person qualified to be a WSC member, and that the meter has to be installed on the property designated to be served. These provisions are both supported by Texas law. 10

Quality on Tap! - Special Legislative Issue 2013

Check to be sure these references are included in your tariff and if so, the member would be prohibited from extending service from one side of the road/alley or across a property line to provide service to a neighbor’s property not designated to receive service according to your tariff. Q: We have paid off our USDA sewer loan that we took out last year. We discussed at our city council meeting last week about giving every customer one free month of

sewer charges for having retired our sewer note as a way of our appreciation. Is there anything that would prohibit us from doing this? The sewer charges are added to every customer’s water bill. The water system is a separate cooperative with which we have an interlocal billing agreement where they do the billing, collect the sewer fee and give us a check.

of the delinquency equals the membership fee, but only before the membership has been transferred to a new owner. With a refundable membership fee, the WSC also can liquidate other memberships the person has on file to satisfy the delinquency. If you have a technical question you would like answered, please e-mail Larry.Bell@trwa.org.

A: I have not heard of any system (water or wastewater) that voted to give a free month’s utility service to all their customers. As a city, the city council could vote to do so since the TCEQ does not have any jurisdiction over municipal wastewater rates. However, we caution against this type of free service. The cost of giving one month free service, especially for a large system, would be better spent or saved for future infrastructure needs so that next time the city will not need to get a loan for water system repairs and upgrades. Q: Can our WSC have a non-refundable membership Fee of $200? We allow transfer of the membership to a new owner, but we require a new owner to pay the previous owner’s unpaid bill if membership is transferred, and we do not apply the membership to a final bill. Are these policies legal? A: WSCs can adopt a non-refundable membership fee policy, but this is not TRWA’s recommendation. Our recommendation is to treat the membership fee like a deposit that may be refunded or liquidated to pay bad debt. Under the law, no new member can be required to pay a previous owner’s bad debt before establishing service. The WSC must “write off” bad debts owed by a previous owner or keep it on the books in case that person tries to establish service in the future. In TRWA’s Sample Tariff, a person who seeks to reestablish service must first pay any past debt owed to the Corporation. We recommend that our members adopt this type of provision in their tariff. If the membership fee is refundable, the WSC can liquidate the membership if the amount

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Quality on Tap! - Special Legislative Issue 2013

A New Day for Rural Water Funding in Texas State Water Plan Funding Mechanisms Aim to Benefit Rural Texas By Fred Aus, Texas Rural Water Association arly on in the 83 rd Texas Legislature’s Regular Session, Governor Rick Perry, Lt. Governor David Dewhurst and Speaker of the Texas House Joe Straus all listed funding of the State Water Plan as a high priority. Ultimately, the Legislature took action that could provide up to $2 billion in funding for projects within the State Water Plan, and more significantly for TRWA members, a portion of that money must be used for projects for rural political subdivisions, as defined by the Texas Water Code provisions of the Rural Water Assistance Fund.

Three pieces of legislation working in concert with each other will provide the new funding: House Bill 4, authored by State Rep. Allan Ritter (R-Nederland) and sponsored by State Sen. Troy Fraser (R-Horseshoe Bay), House Bill 1025, authored by State Rep. Jim Pitts (R-Waxahachie) and sponsored by State Sen. Tommy Williams (R-Woodlands), and Senate Joint Resolution 1, authored by Sen. Williams and sponsored by Rep. Pitts.

a unique opportunity for the state to help meet its obligation in funding water infrastructure in Texas. It is even more noteworthy that a legislature increasingly dominated by urban and suburban legislators saw fit to include a placeholder for rural areas. Additionally, the ongoing drought – which some experts are predicting that Texas is in the fourth year of a 10-year drought – provides more immediacy to funding water supply infrastructure. Sen. Fraser, who chairs the Senate Natural Resources Committee, led the fight for rural water funding needs throughout the Regular Session. He championed the idea of a 10 percent placeholder for the new water funding to go to rural areas. TRWA staff visited with him late last year to ask for his support and let him know that TRWA members alone provide water to 2.5 million Texans, approximately 10 percent of the state’s population.

“TRWA urges its members to support the passage of Proposition 6 in November.”

In short order, HB 4 creates the SWIFT – the State Water Implementation Fund for Texas – and dictates a framework for how funding from the SWIFT should be prioritized; HB 1025 allows for the transfer of $2 billion from the State’s “Rainy Day Fund” (more formally known as the Economic Stabilization Fund); and SJR 1, a proposed constitutional amendment, Proposition 6, which will need to be approved by Texas voters on November 5 to allow for the SWIFT to be created. TRWA urges its members to support the passage of Proposition 6 in November. This is 12

Quality on Tap! - Special Legislative Issue 2013

“As an elected official, I have thought, what could be my legacy, what could I say I have accomplished,” Fraser said. “And if I can leave a supply of potable water for our children, our grandchildren and possibly their children, I think that would be the greatest gift I could give, of having played a part hopefully of coming up with that water source, especially for rural Texas.” In addition to the set-aside, Sen. Fraser entered into the record a Statement of Legislative Intent to set out his expectations of the Texas Water Development Board (TWDB) as the rulemaking and implementation of HB 4 proceeds. He stated in part that the funding prioritization provisions of HB 4 “are intended to provide a level playing field so that a variety of projects may be eligible for

funding including projects serving smaller rural communities.â&#x20AC;? HB 4 also revamps the TWDB, changing it from a six-member, part-time governing board to a three-member, full-time board. Gov. Perry has appointed the new Board members, who started September 1, 2013. Carlos Rubinstein has departed his role as a Commissioner of the Texas Commission on Environmental Quality and will serve as the new TWDB Chair. Chair Rubinstein has a long tenure in the water industry, having previously served as the Rio Grande Watermaster. The other two TWDB appointees are Bech Bruun, who has been Gov. Perryâ&#x20AC;&#x2122;s Director of Governmental Appointments and who also worked at Brazos River Authority, and Mary Kay Williamson, who has been serving as Chair of the Texas Lottery Commission. TRWA is reaching out to these new TWDB members as we seek to build an even better relationship with TWDB. â&#x20AC;&#x153;The opportunities for new funding, along with a new make-up of the Texas Water Development Board, mean that the Legislature has created a new day for rural water funding in Texas,â&#x20AC;? said TRWA Board President James Morrison. â&#x20AC;&#x153;TRWA members will have to step up to meet the challenge to engage in the regional and state water planning processes to take advantage of these potential new funds. One of the first things that TRWA member utilities should do is respond to any and all questionnaires and surveys that they receive from the consultants for the regional water planning groups. TRWA will support and advocate for its members any way we can going forward.â&#x20AC;? TRWA staff has already been meeting with TWDB officials to discuss how TRWA members can best access funding through TWDB in the wake of the legislatureâ&#x20AC;&#x2122;s work this session. TWDB officials have so far been very welcome to TRWAâ&#x20AC;&#x2122;s ideas about ways to make TWDB more customer-friendly to rural water systems. TRWA staff will be active in the rulemaking implementation of HB 4. And, just as important for TRWA members, TRWA training opportunities will include sessions on water infrastructure funding and financing â&#x20AC;&#x201C; at

TRWAâ&#x20AC;&#x2122;s Fall Management Conference in San Antonio in October and Dallas in November, TRWAâ&#x20AC;&#x2122;s Districtsâ&#x20AC;&#x2122; Conference in Dallas in November, and at TRWAâ&#x20AC;&#x2122;s Water Board Directorsâ&#x20AC;&#x2122; Governance Conference in Austin in January. Please stay in contact with TRWA to learn more about how these new laws can help your utility meet its future water supply needs.

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Quality on Tap! - Special Legislative Issue 2013

Fireflow Bills Took Center Stage this Legislative Session By Pauline Word and Lara Zent, Texas Rural Water Association

he issue of fireflow proved to be our biggest challenge this legislative session. Several legislators sought to increase a city’s authority to impose fireflow requirements on water systems serving in city boundaries and extra-territorial jurisdictions (ETJs). TRWA’s Board of Directors recognized that fireflow would be a challenge this session and therefore made it a legislative priority for TRWA’s legislative team to play an active role in regards to any bills that proposed new requirements and to ensure that our members’ interests were protected. Legislators filed 10 fireflow-related bills and companions in the Texas House and Senate this session, mostly focusing on broadening a city’s power to regulate this issue in its corporate limits and ETJ. Cities made a compelling argument that high population density warrants minimum fireflow standards that help protect the public’s health and safety, and that they are in the best position to set these standards for their communities. The devastating and costly wildfires throughout the state in late 2011 and last year helped make their case for the need for more regulation in this area. The key piece of legislation that passed this session is House Bill 1973 by Rep. Eddie Lucio III. Sen. Glenn Hegar sponsored the bill in the Senate. The bill applies statewide to water supply corporations (WSCs) and investor-owned utilities (IOUs) and adds a new section in Chapter 341 of the Texas Health & Safety Code called “Fire Hydrant Flow Standards.”

Quality on Tap! - Special Legislative Issue 2013

As originally filed, the bill would have given cities sole authority to set fireflow standards for WSCs and IOUs serving within their limits or ETJs. Violation of the city standards would have resulted in fines and penalties and the bill prohibited these systems from recovering these fines and penalties through their rates. TRWA’s legislative team began working with Rep. Lucio on the bill immediately after it was filed on February 27. Rep. Lucio invited TRWA and a couple of our Rio Grande Valley members to participate in several stakeholder meetings. We worked diligently to provide Rep. Lucio with bill language that would be fair to rural water systems while recognizing that fireflow is a necessity in high density residential areas. TRWA’s legislative team asserted that: (1) the Texas Commission on Environmental Quality (TCEQ), as opposed to a city, is the neutral entity that should set the standards which cities may then choose to adopt; (2) A city should not be able to impose a greater standard than the city itself is able to provide; (3) New fireflow standards should only apply to new development because retrofitting of current utility lines would be cost prohibitive to existing customers; and (4) Cities that seek to utilize a water system’s lines and hydrants should be required to enter into an agreement regarding the terms of that use. Rep. Lucio, a member of the House Committee on Natural Resources, said, “I thank the TRWA Board and staff for working so hard on fireflow

issues with me during the legislative session. I am proud that HB 1973 represents the synergistic efforts of stakeholders coming together to focus on good public policy – and public safety – in a sensible way.” In the negotiated final version of HB 1973, the TCEQ will establish fireflow standards that a city may adopt for systems serving in their corporate limits or ETJ. The law sets forth the minimum standard for a residential area as being 250 gpm while maintaining minimum 20 psi for at least two hours. TCEQ may set a standard that is higher than this minimum. Also under HB 1973, a city cannot require a WSC or IOU to meet a fireflow standard that the city’s water utility cannot meet, and an ordinance cannot require a WSC or IOU to retrofit existing infrastructure at the time the ordinance is adopted. The law also specifies that if a city wants to use a WSC’s or IOU’s water for fire suppression purposes, the city must enter into a memorandum of understanding with the WSC or IOU to address issues relating to the use of water and maintenance of the fire hydrants. Regarding enforcement, a city may notify TCEQ of a utility’s failure to comply with a standard; and in response, TCEQ must require the utility to comply within a reasonable time that the agency establishes. There is no fine or penalty provision in the final version of the bill. Finally, HB 1973 provides that a WSC or IOU is not liable for a hydrant’s or metal flush valve’s inability to provide adequate water supply in a fire emergency. TRWA Board members testified and were active in the negotiations on HB 1973. “It was abundantly clear, from conversations with legislators and from debate during legislative hearings, that the Legislature expects water utilities of any and all sizes to meet the fireflow needs of growing communities,” said TRWA Board President James Morrison. “TRWA members had a unique opportunity to weigh in on our concerns to ensure that we would be treated fairly and have a voice in that process.” “Coming from an area with multiple cities around our CCN, we appreciate Rep. Lucio listening to the issues raised by TRWA members and recognizing that many rural water utilities are

already doing a lot to meet fireflow needs,” said TRWA Board member Brian Macmanus, who now chairs the Board’s Legislative, Legal and PAC Committee. TRWA will be very involved in TCEQ’s rulemaking process to implement these fireflow standards. Rulemaking generally starts in the year following a legislative session. Another fireflow bill that became law was HB 1768 by Rep. Terry Canales which is bracketed to all public water systems in Cameron, Hidalgo, Starr and Willacy counties in the Rio Grande Valley. The law pertains to the “black fire hydrant” provisions in Chapter 341 of the Health & Safety Code. HB 1768 requires all public water systems in these four counties to paint all or the cap of a fire hydrant white if it is available to fire departments for filling tanks only and to paint it black if it is not available for any fire suppression use. Systems may ensure that hydrants are visible in low-light conditions using means such as installing reflectors. The law also provides that a public water system is not liable for a hydrant’s inability to provide adequate water supply in a fire emergency. TRWA also worked with Rep. Canales on language clarifying that this bill would pertain to all public water systems in the bracketed counties. HB 3813 by Rep. Donna Howard, another bill that became law, is bracketed to a water control and improvement district (WCID) in the city of West Lake Hills, just west of Austin, and may have limited applicability in other large metropolitan cities such as Houston. The law requires a WCID operating within a city’s boundaries to take reasonable measures to comply with fireflow and water pressure standards adopted by city ordinance, which may include retrofitting existing service lines. Of potential significance in this bill is that it recognizes the financial impact that these new requirements may have on the customers in impacted areas. The bill provides that the WCID may recover costs through rates to municipal customers if the city imposes “more stringent” water flow and pressure standards inside the city than are required outside city boundaries. Senate Bill 1086 by Sen. Donna Campbell is bracketed to Buda and Kyle in Hays County and Continued on page 16 Quality on Tap! - Special Legislative Issue 2013

Continued from page 15

Cibolo near San Antonio and provides these cities with the regulatory authority to impose standards for fire hydrants and water pressure for IOUs operating within their boundaries. Although this and SB 3813 are bracketed to particular cities, they create a place in the law for other cities to expand upon, so it will be important for TRWA to be vigilant in its efforts to prevent this from happening in the future. There were several other bills of concern pertaining to the fireflow issue that lawmakers filed but that did not pass this session. HB 2677 by Rep. Joe Moody would have amended Chapter 342 of the Local Government Code to provide cities with the authority by ordinance to establish standards that require any retail public utility serving in the city or the city’s ETJ to provide water flow that is sufficient to provide adequate pressure to fire suppression systems and equipment, including fire hydrants. The bill also would have amended Section 13.247 of the Water Code to provide a city with authority to set service standards for a retail public utility operating within the city’s boundaries, “in the same manner that the municipality would be required to provide the service or operate the facilities.” The bill also provided that an owner of a device that has the appearance of a fire hydrant may not paint it black or place a black tarp over it if it is “functioning.” HB 2677 was left pending in the House Natural Resources Committee on April 9. SB 1801 by Sen. Kirk Watson would have allowed cities with a “wildland-urban interface” to pass a fire hydrant ordinance regulating flow and pressure standards for all hydrants within

Quality on Tap! - Special Legislative Issue 2013

the city. The bill would have applied to cities with populations of greater than 2,500 in all but 10 Texas counties. The bill passed the Senate on May 2 and was referred to the House Natural Resources Committee on May 6, but was not heard in the committee. TRWA vetted and strongly protested another bill draft that did not end up getting filed. The bill would have allowed a city to petition TCEQ to decertify the CCN area of a system that failed to meet the city’s fireflow standards. The bill would have required TCEQ to grant the petition within 60 days with no right to appeal. Questions about these bills may be directed to legal@trwa.org. You are also encouraged to attend our Fall Management and Water Districts’ Conferences this fall where attendees can learn more about these and other legislation that may affect the way TRWA members do business. Details on these conferences and registration can be found at online www.trwa.org.

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Sunset Bills Result in Rate and CCN Jurisdictional Transfer to the Public Utility Commission By Allison Kaminsky, Texas Rural Water Association he 83 rd Legislature has passed legislation that will transfer water and sewer rate jurisdiction and regulation of water utility certificates of convenience and necessity (CCNs) from the Texas Commission on Environmental Quality (TCEQ) to the Public Utility Commission (PUC). This transference of responsibility comes in the form of Senate Bill 567 and House Bill 1600, which will go into effect on September 1, 2013 but will not be fully implemented until September 1, 2014.

Regulation of CCNs and water and sewer rates is a familiar topic for Texas Legislators. In 2011, lawmakers attempted to pass similar legislation in response to recommendations made by the Sunset Advisory Commission. The Sunset Commission is a legislative body that reviews the policies and programs of government agencies and makes recommendations for improvement to the full Legislature. The Sunset Commission conducted a review of the PUC and issued a full report with the goal of improving operations and activities. One of the major recommendations was that the state could benefit from transferring regulatory functions related to water and wastewater utilities to the PUC. The response was Senate Bill 661, coauthored by Sen. Robert Nichols and Sen. Glenn Hegar, which proposed to do exactly that. The transfer of rate and CCN programs was supported by the leadership of both TCEQ and PUC; however, the bill failed to pass due to a point of order. The Legislature responded by directing the Sunset Commission to immediately conduct a follow up review of the PUC and their existing recommendations to determine their appropriateness going forward. The topic was thrust into the spotlight again during the 83rd Legislature. The Sunset Commission issued their follow up report and held that the recommendations be reconsidered. 18

Quality on Tap! - Special Legislative Issue 2013

Subcommittee hearings held in the interim produced compelling testimony regarding increases in water and sewer rates imposed by large investor-owned utilities (IOUs). In fact, the only organized opposition to either HB 1600 or SB 567 during the regular session was from the large investor-owned utilities at whom the bills were aimed. This resulted in two bills, SB 567 by Sen. Nichols and HB 1600 by Rep. Byron Cook, being filed that incorporate most of the Sunset Commissionâ&#x20AC;&#x2122;s recommendations from 2011. This includes the transfer of all water and sewer economic regulation duties, issuance and transfer of CCNs, determination of rates, and all related hearings from the TCEQ to the PUC, as well as the obligations, contracts, property and records related to the transferred programs and duties. HB 1600 also reauthorized the PUC for another 10 years. Both bills were met with success in the House and the Senate, but Governor Perry allowed them to become law without his signature. â&#x20AC;&#x153;While I have concerns about transferring the rate-making functions for water and wastewater to the Public Utility Commission, I agree with the overall goal of improving the rate process for the affected customers,â&#x20AC;? Governor Perry said in a press release. These companion bills are driven mainly by consumers of water service provided by IOUs and are not targeted at water supply corporation or water district rates. Currently, IOUs must get TCEQ approval to raise rates, whereas TCEQ only has appellate jurisdiction for water supply corporations and districts. Starting September 1, 2014, the PUC will acquire the appellate review jurisdiction; however, there were no other changes made to the law pertaining to the appellate review procedures. The amendments to the review process were aimed at IOUs and

will essentially create a more burdensome rate change application for IOUs that serve 10,000 or more connections. Although the overall law takes effect on September 1, 2013, the transfer will not be immediate. In fact, although the Office of Public Utility Counsel gains the authority to initiate or intervene in any contested case at TCEQ on the 2013 date, TCEQ and PUC have until August 2014 to complete a Memorandum of Understanding that details the powers and duties being transferred and a plan for implementation. Then on September 1, 2014, the rate and CCN programs will officially transfer to the PUC. Please refer to figure A for a complete timeline for the transfer. TCEQ and PUC will appoint a transition team to work out the details of the transfer. The Texas Rural Water Association will be heavily involved in the rulemaking process for implementing the transfer and will advocate for our members every step of the way. Sen. Nichols and Sen. Watson asked for TRWA input throughout the session on this topic and insisted that their focus was on large IOUs. We expressed our concerns, primarily about unintended consequences from implementation, and how TRWA members might be viewed by regulators at an agency unfamiliar with rural water utilities. These types of issues are difficult to address through statute. TRWA will be working with PUC Commissioners and staff to educate them about the specific concerns and challenges faced by TRWA members. This will include reaching out to the newest PUC Commissioner, Brandy Marty, who has just been appointed by Gov. Perry, following her service as Gov. Perry’s Chief of Staff. There is still a lot of work to be done to determine how this transition is going to work, and we will keep you updated as things progress. Check back on our website and in future issues of this magazine for additional information. We will also have a legislative update at our Fall Management and Water Districts’ Conferences this fall where attendees can learn more about these and other legislation that may affect the way TRWA members do business. Details on these conferences and registration can be found at online www.trwa.org.

F IGURE A: P ROGRAM T RANSFER T IMELINE September 1, 2013 • Overall law takes effect • The Office of Public Utility Counsel gains authority to initiate or intervene in any contested case at TCEQ that it would be entitled to initiate or intervene in if the case was before the PUC August 1, 2014 • Memorandum of Understanding must be completed between TCEQ and PUC about powers and duties being transferred and plan for transfer September 1, 2014 • TCEQ ceases water and sewer economic regulation duties • The following is officially transferred to PUC: • all economic regulation of water and sewer service; • issuance and transfer of CCNs; • determination of rates; • all hearings related to economic regulation, rates and CCNs; • all TCEQ obligations and contracts related to programs or activities transferred under the law; and • all property and records related to duties transferred. September 1, 2015 • Deadline for TCEQ and PUC to adopt rules to implement changes in law to Water Code Chap. 13 and Sec. 12.013 Water Code (rate-fixing power)

Quality on Tap! - Special Legislative Issue 2013

Water Districts and the 83rd Legislature: How Will You Be Affected? By Lara Zent, Texas Rural Water Association

ot many bills passed by the Legislature this session targeted water districts. For the most part, the bills that passed created positive changes to the law. In addition, there were also several amendments to the Election Code that impact districts and other political subdivisions. Senate Bill 902, an omnibus districts bill by Sen. Troy Fraser, also contains several amendments to the elections law that apply solely to district elections. SB 902 amended several sections of the districts law that took effect September 1. The most significant changes for TRWA members include the following: •

It removes the 5 percent fee cap that districts may charge customers for credit card transactions, but the fee must still be reasonably related to the expense incurred by the district in processing the payment by credit card.

•

It amends the requirement to advertise for the letting of a contract to those over $75,000 (up from $50,000) and makes conforming changes to contracts requiring solicitation of written bids, the range now being from $25,000 to $75,000.

•

It provides the board with the authority to allow disbursements and transfers of district money by electronic means, updating the law to reflect current business practices.

•

It provides that the validity of an action taken at a board meeting is not affected by the failure of the county clerk to post notice of the meeting as long as the board followed the Open Meetings Act requirements by providing the notice to the clerk.

Two bills that passed pertain to the way a district may bill a recreation vehicle park for water service. House Bill 2152 by Rep. Bill Callegari provides that a district may not charge a fee to an RV park on the basis of the number connections the park provides for its transient customers. Instead, the rate must 20

Quality on Tap! - Special Legislative Issue 2013

be charged on the basis of meter size. Sen. Eddie Lucio’s SB 1268 provides that a district may not charge an RV park an “administrative fee” for the services provided. Both bills took effect September 1. HB 4 by Chairman Ritter primarily pertains to the new State Water Implementation Fund for Texas, but it also includes language amending Chapter 49 of the Water Code that benefits districts that seek to borrow money from CoBank. The bill amends Sections 49.153 and 49.181 creating the same exceptions in the law for obtaining financing from CoBank as already exist for USDA—Rural Development and the Texas Water Development Board. SB 902 also amended several provision of the elections law as it pertains to district elections that supersede the requirements in the Election Code. The provisions of significance to TRWA members include: •

It eliminates the electronic voting machine requirement if the most recent election was unopposed and cancelled, or if less than 250 people voted at the most recent district election (new Section 49.111, Water Code). A district must publish notice in a newspaper of its intent to hold an election without an accessible voting machine not later than 75 days before the election or on the date the district adopts the election order. If a disabled voter requests use of an accessible voting machine by the 45th date before the election, the district must provide it.

•

It exempts districts from provisions in Election Code Section 32.009 that require notice to a person who is appointed to be a presiding election judge and exempts districts from the county prescribed election judge eligibility requirements in Election Code Section 32.051. New Water Code Section 49.110 provides that an election judge for district elections only must be a registered voter of the county in which the district is wholly or partly located and provides that to the extent this section conflicts

and where the district has not executed a contract with the county to share early voting polling places for the election, the district must designate as an early voting polling place a location in the district that is also an early voting place established by the county. This early voting location must be open for voting for at least the days and hours required of a main early voting polling place, which is generally the 17th day before the election and continuing through the fourth day before the election. See HB 506 creating new Section 85.010.

with Section 32.052 of the Election Code, this section controls. •

New Water Code Section 49.112 for districtcalled elections provides that the board by resolution may cancel an election or remove any ballot measure before the first day of early voting by personal appearance. This section implements Election Code Section 2.082 that states that an entity can only cancel an election if the power to do so is specifically provided by statute. This section is stronger than Election Code Section 2.081 that only allows cancellation of a moot measure.

•

New Water Code Section 49.113 provides that notice required under Election Code Section 141.040 for candidate filing must be posted at the district’s in-district administrative office or the place the district posts meeting notices at least 30 days before the candidate filing deadline.

•

Water Code Section 49.105(c) now provides that if a vacancy exists on the board for more than 90 days, the Texas Commission on Environmental Quality (TCEQ) may appoint a replacement director. This provision was mandatory, but TCEQ was not in the practice of appointing directors to fill vacancies on district boards.

The Legislature also passed a significant number of bills that amend the Election Code. This article will discuss a few of those amendments that may be of particular interest to TRWA district members. •

SB 910 amends Section 1.007 adding “telephonic facsimile machine” as a way to deliver, submit or file a document or paper under the Election Code.

•

The Election Code has provided a deadline for filing an application for a place on the ballot, which is not later than 5 p.m. of the 62nd day before election day; however, it has not provided a date when applications could start being submitted. Section 144.005 was amended to provide that an application may not be filed earlier than the 30th day before the date of the filing deadline. See SB 910.

•

If an election is held on the November uniform election date, but not jointly with a county

•

A political subdivision may not prohibit electioneering (meaning posting, use or distribution of political signs or literature) beyond the 100 foot restriction during the voting period, but may enact reasonable regulations concerning the time, place and manner of electioneering. See Section 61.003, amended by HB 259.

Finally, HB 1129 is of interest because it creates an “e-mail ballot program” (new Section 105.004) to make it easier for military voters on active duty overseas to cast a ballot. This bill requires the Secretary of State to create a pilot program for a county to utilize whereby a military voter instead of casting an early ballot by mail may scan and submit it by e-mail. There will be a presentation on elections at the Water Districts’ Conference this fall that will go into more detail about all the changes in the law. For more information about this conference and to register, please visit our website at www.trwa.org. Questions about these and other legislation may be directed to legal@trwa.org.

Quality on Tap! - Special Legislative Issue 2013

Keep It Legal

Answers to Members’ Questions by Lara Zent,TRWA General Counsel and Deputy Executive Director

Our new board of director policy states that if a person has any conflict of interest they are not eligible to run for a board position. Last year, we appointed a new board member after the former member resigned. The new board member’s term of office is up next year. He currently works for a company that supplies products to the water supply corporation. He has been straight-forward about this during his term and has refrained from voting when the supply contract comes up. Will he be eligible to run for re-election under the new policy? And what constitutes a conflict of interest? A: Yes, the board member will be eligible to run for a board position. A board policy stating that if a person has a conflict of interest they are not eligible to run for the board is inconsistent with the law and does not have the force and effect of the law. This type of provision would need to be set forth in the corporation’s bylaws, but I recommend against this approach because it may greatly narrow the pool of eligible people to run for the board and the law clearly addresses how to address a conflict of interest. The conflict of interest laws and the laws pertaining to whether a person is qualified to serve on a board of directors of a WSC are often confused. If a person has a conflict of interest pertaining to a particular contract or transaction, they must disclose that interest to the rest of the board members and the board may still vote to enter into the contract or transaction. There is no requirement that the interested director step down from serving on the board and the law does not disqualify a person who may have a conflict of interest from running for a board position. Business Organization Code Section 22.230 provides that a conflict of interest exists for a director if there is a contract or 22

Quality on Tap! - Special Legislative Issue 2013

transaction between the corporation and the director or between the corporation and an entity or organization in which the director is a managerial official, a member or has a financial interest. As long as the material facts as to the relationship or interest is known by the corporation’s board or the contract or transaction is fair to the corporation when the contract or transaction is authorized by the board, then the contraction or transaction is valid and enforceable despite any conflict of interest of the individual board member. The law also provides that an “interested” director may be included in determining the presence of a quorum at a meeting, and may be present and participate in and vote at the meeting of the board where the contract or transaction is authorized. TRWA has always recommended that the board adopt a policy that the interested director refrain from discussion and voting on the issue where they have a conflict, but this is not required by law. The issue of whether a person is qualified or disqualified to serve on the board is addressed elsewhere in the law. Section 67.0051 of the Water Code requires that a person be at least 18 years of age, a member of the corporation, and not have been finally convicted of a felony or determined mentally incapacitated by final judgment of a court exercising probate jurisdiction. Business Organization Code Section 22.203 states that the certificate of formation or bylaws may prescribe qualifications for directors. TRWA has read these two provisions together as setting forth minimum qualifications, but also allowing for a corporation to add additional director qualification or disqualification provisions in their bylaws beyond those set forth in Section 67.0051. Q: May a special utility district charge a fee to process credit card payments in the office, by telephone, or online? If so, is there

a maximum amount or percentage that can be charged? Is the law different for water supply corporations? A: Yes, a district may charge a fee to process a credit card. The cap under Texas Water Code Section 49.2121 was 5 percent of the amount of the fee or charge being paid; however, this cap was removed this legislative session in Senate Bill 902, effective September 1, 2013. The fee still has to be reasonably related to the expense incurred by the district in processing the payment. Section 339.001 of the Finance Code still prohibits non-governmental entities, including water supply corporations, from imposing a surcharge on a person who pays for services by credit card. This section of the Finance Code was amended by House Bill 2548 this session transferring enforcement authority of this section from the Finance Commission to the Office of Consumer Credit Commissioner, one of the three offices that is overseen by the Finance Commission. This bill also makes conforming changes to Chapter 14 of the Finance Code.

The bill analysis for HB 2548 explains that the Finance Commission has broad rulemaking authority with regards to financial services, but lacks a legal or investigative department. Therefore, the Finance Code generally grants related enforcement authority to one of the three agencies under its purview. Section 339.001 had mistakenly delegated enforcement authority of this provision to the Finance Commission instead of to the Office of Consumer Credit Commissioner which regulates this kind of activity. Now that enforcement authority for Section 339.001 is assigned to the Office of Consumer Credit Commissioner, there may be more active enforcement on this issue which we will be keeping an eye on. A related question is whether water supply corporations may charge a fee for online bill pay. As long as the fee applies equally to any form of payment, I am not aware of any prohibition to charging this type of fee. Continued on page 24

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Quality on Tap! - Special Legislative Issue 2013

Continued from page 23

Q: We are a municipality and we have a small RV park in our corporate boundaries where the residents are complaining about high water bills. The city has one water meter at the park and the park owner pays the city for the water service to that meter. He then submeters water service to all the park’s residents. We suspect that he is making a profit on the water. Is there anything that we can do to help these residents? What recourse do they have regarding their water bills? A: In order for the RV park owner to bill tenants for submetered or allocated utility service, they must be registered in accordance with Section 291.122 of TCEQ’s rules. You may call the TCEQ utility consumer assistance department to find out if this individual is registered. The RV park owner is subject to the requirements set forth in Subchapter M, Chapter 13, Water Code, and the TCEQ rules at Subchapter H, Chapter 291, pertaining to submetering water bills and is not entitled to make a profit. The city may be in the best position to assist its residents on this issue. If the RV park is making a profit, the city may file a cease and desist action with TCEQ because at that point, the RV owner is operating as a retail public utility within the city’s limits and/or CCN. The city may audit the RV park or take other measures to investigate whether a profit is being made. TCEQ rules do not provide TCEQ with explicit authority to resolve these issues. The rules provide that the rental agreement between the RV park owner and the tenant must clearly inform the tenant that they will be billed for water service, how that will be calculated, and must make clear that any disputes relating to the computation of the tenant’s bill or the accuracy of any submetering device will be between the tenant and the owner (See 30 Texas Administrative Code Sec. 291.123). Section 291.125(l) provides that in the event of a dispute between a tenant and an 24

Quality on Tap! - Special Legislative Issue 2013

owner regarding any bill, the owner must investigate the matter and report the results of the investigation to the tenant in writing. This report must be completed within 30 days from the date the tenant gives the written notice of the dispute. If the tenant is not satisfied with the results of the report or the owner fails to provide a report, the rules do not provide a remedy. TCEQ’s consumer assistance staff will try to mediate and resolve these matters amicably, but that is the extent to which they get involved. There is a specific remedy set forth in Chapter 13 of the Water Code if a tenant chooses to try to resolve this issue through the courts. Section 13.505 of the Water Code provides that if a court finds that an owner of an RV park owner violates a commission’s submetering rule, the tenant may recover three times the amount of any overcharge, a civil penalty equal to one month’s rent, reasonable attorney’s fees and court costs from the owner. If you have a legal question you would like answered, please e-mail legal@trwa.org.

TRWA Briefs Texas Rural Water Foundation Appoints New Board, Selects Branding

On July 17, 2013, the Texas Rural Water Research & Education Foundation held a Board meeting in which a new slate of Board Members was appointed. The new Board is as follows: John Frantz – President Kevin Spence – Vice-President Charles Beseda – Secretary Pat Allen – Treasurer Clay Hodges – Member

Once appointed, the new Board approved a name change for the Foundation to be henceforth known as the Texas Rural Water Foundation or TRWF. The Board was presented with several logo proposals, which they reviewed for the first time at the meeting. They then provided written feedback to the Foundation branding development team. The Board was presented with new logo proposals incorporating their feedback, and on August 7th, a logo and tagline were officially selected. We are pleased to reveal the Foundation’s new logo:

The new Board Members are very enthusiastic and impressed with all the work that has been accomplished by the AmeriCorps VISTAs and the TRWA staff for the Foundation this year. Updates on the Foundation and the VISTAs’ supporting activities can be found online at www.trwa.org/ foundation and in future issues of this magazine.

TRWA Announces New Legislative, Legal & PAC Committee Chair During its July Board Meeting, the TRWA Board of Directors appointed Brian Macmanus of East Rio Hondo WSC as the new Chairman to the Legislative, Legal & PAC Committee. This committee is charged with soliciting ideas, requests and legal issues from the membership and then organizing them into a coordinated policy of legislative or legal action for recommendation to the Board of Directors. The committee also reviews all proposed federal and state legislation as to its impact on the membership and may recommend legislative policy in response to a specific situation, emergency or crisis without Board approval. In addition, the committee ensures the Texas Rural Water Political Action Committee is properly funded by way of sponsorship and fundraising drives in accordance with the Texas Rural Water PAC Bylaws. Join us in welcoming Brian Macmanus to this new position!

Update Your TRWA Address Book! The Foundation’s official brand colors will be teal and royal blue, and the tagline was selected to represent the Foundation’s mission and vision: “Empowering Utilities. Cultivating Progress.” “The tagline represents the Foundation’s mission to provide utilities with the support and resources needed to make the most innovative decisions for the future,” said Brandee Cooklin, TRWF Foundation Development Specialist.

Please note that we have streamlined our e-mail prefix naming conventions to include a period between the complete first and last name of the addressee. For example, what was formerly JohnDoe@trwa.org or JDoe@trwa.org is now John.Doe@trwa.org. Be sure you have updated your TRWA e-mail contact list with TRWA’s newest e-mail addresses to ensure your messages are received in a timely fashion. If you are unsure of who to contact, you may always e-mail info@ trwa.org, and your message will be routed to the appropriate person. Quality on Tap! - Special Legislative Issue 2013

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Quality on Tap! - Special Legislative Issue 2013

Plan Ahead CONFERENCES: October 8-9, 2013 San Antonio Fall Management Conference, Omni Colonnade, San Antonio, TX

November 6-7, 2013 Dallas Fall Management & Water Districts’ Conferences, Omni Dallas at Park West, Dallas, TX

January 23-24, 2014 Water Board Directors’ Governance Conference, Austin Doubletree North, Austin, TX

OPERATOR TRAINING COURSES: Water Credit Courses Basic Water Works Operations: San Antonio, September 11-13 Customer Service Inspections: Mabank, September 24-25  Harlingen, October 8-9  Terrell, October 22-23 Groundwater Production: Itasca, September 4-6 Surface Water Production 1: New Braunfels, September 17-19 Surface Water Production 2: New Braunfels, October 15-17  Corsicana, October 22-24 Water Distribution: San Antonio, September 18-20  Midlothian, October 1-3  Bishop, October 8-10 Water Utility Safety: San Antonio, October 9-11  Harlingen, October 29-31 Water Utility Calculations: San Antonio, October 23-25

Water and Wastewater Credit Courses Applied Confined Space: Temple, September 4  Converse, October 2 Chlorine Use, Handling, Safety & SCBA: Converse, October 1 Pump and Motor Maintenance: Harlingen, September 10-12 Valve and Hydrant Maintenance: Springtown, September 24-26

Wastewater Credit Courses Basic Wastewater: San Antonio, October 16-18 Wastewater Training: Pleasanton, September 18  Industry, October 16 Wastewater Treatment: Comanche, September 10-12 Wastewater Collections: San Antonio, September 25-27

Public Funds Investment Act Training Renewal 4-Hour Training: Dallas, November 5

Quality on Tap! - Special Legislative Issue 2013

1616 Rio Grande| Austin, TX 78701-1122 Telephone: (512) 472-8591 | Fax: (512) 472-5186 www.trwa.org

2013 Fall Management Conference Arm yourself with the latest updates in utility regulation! Water system directors and managers are invited to attend at o one ne of of the the following folllowin ing llocations: ocat s:

San Antonio

Dallas

October O ctober 8 8-9 -9

November N ovember 6-7 7

Omni O mni Colonnade Colon nnade Hotel Hotel

Omni O mn ni Dallas Dallas at at P Park ark kW West est

Registration Now Open! Visit www.trwa.org for Details