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Thu October 31, 2013
Will Prop 6 Water Fund Deliver As Planned? Bill Author And Ex-Water Exec Disagree
The lawmaker who sponsored the Proposition 6 water legislation on the Nov. 5 ballot is defending it from criticism leveled by a former state water board executive and a candidate for governor.
Here’s the promise water fund supporters have made: if voters agree to move $2 billion from the state’s Rainy Day savings account to the Texas Water Development Board, the board will invest it and turn it into $27 billion in financing for new reservoirs, desalination plants and other water projects.
However, the water board’s former executive administrator, Melanie Callahan, doesn’t believe the money will stretch that far.
“I think it will definitely provide some funding for state water plan projects,” said Callahan. “I do not think after looking at the model it will get the full amount- the $27 billion- they’re talking about.”
Callahan is a certified public accountant who worked at the water board for 12 years. She served as the chief executive from 2011 until earlier this year when the legislature reorganized the agency and eliminated her position.
Callahan believes the type of financing planned won’t allow the $2 billion to grow as suggested and she says the fund could eventually run dry.
“If parts of it is used to pay debt service meaning it gets paid to Wall Street for bonds that money’s not coming back. It’s paid. Also, I think there may be some issues of how much interest is going to be allowed to be earned on the $2 billion because of IRS regulations regarding tax exempt bonds,” said Callahan.
Rep. Allan Ritter, the Nederland Republican who sponsored the water fund legislation, says Callahan is wrong.
“I totally disagree (with her),” said Ritter. “We modeled over a thousand different strategies so we know it can work.”
Ritter is also taking issue with claims raised by GOP gubernatorial candidate Tom Pauken. He says the reorganization of the water board under Ritter’s legislation could lead to favoritism when board members decide which water projects will receive the money.
Pauken acknowledges a water crisis and says he will probably vote for Proposition 6. But he doesn’t like the shift from a board with six, part-time members who worked with Callahan to a board with three paid, full-time members appointed by Gov. Rick Perry.
Pauken claims the new, full-timers don’t represent the entire state and some don’t understand water.
“There’s only one person with any water experience,” said Pauken referring to Carlos Rubinstein, the new board chair.
“There’s no representative for farmers or ranchers for West Texas,” said Pauken. “I would make sure all three members are very knowledgeable about the water issue which is extra complicated,” he added.
Ritter called Pauken’s criticism “hogwash” adding, “Carlos Rubinstein he’s got more knowledge on water than probably anybody in the state of Texas.”
Rubinstein’s experience includes serving as the city manager of Brownsville and a commissioner for the Texas Commission on Environmental Quality (TCEQ). Board member Mary Ann Williamson is a certified public accountant who owns a natural gas company and chaired the Texas Lottery Commission. The third board member, Bech Bruun, is an attorney who served as director of governmental appointments for the governor’s office and as the government and customer relations manager for the Brazos River Authority.
Ritter says a full-time board is needed because the part-time board didn’t have the capacity to work with local water districts and cities that want to develop their water supplies.
Ritter, a 16-year legislative veteran who isn’t running again, says developing new water sources for this thirsty state is crucial.
“I believe this is the most important issue today,” he said
Critics of Proposition 6, including Callahan and Pauken, may agree with that. They just don’t think this measure will deliver as promised.