Council discusses failed water agreement; outlines potential water plant for the future

Posted by : Monitor Admin | On : February 17, 2017

By Pearl Cantrell
Monitor Staff Writer
KEMP–Residents filled the Kemp City Council Chamber Tuesday to question and to hear why the mayor and her administration have pulled away from having West Cedar Creek Municipal Utility District provide the city’s water. A half dozen citizens signed up to address the council with several giving up their allotted three minutes to two of the major speakers. Both citizens and then the council and mayor spoke passionately for their positions, while audience members, including WCCMUD board president Clifton Smith and utility general manager Tony Ciardo listened to the hour-long discussion.
The same day the Public Utilities Commission accepted the transfer of water rights from Kemp to WCCMUD (Dec. 16, 2016), the parties withdrew their application. The agreement between the city and WCCMUD dissolved into disarray and water service was terminated Dec. 20. The parties are called to mediate their differences in the City of Kaufman, Feb. 21.
Voters approved handing over its water rights to WCCMUD during the general election of Nov. 5, 2013, former city administrator James Whitehead pointed out in his remarks.
Having led the city dating back to 2011-2013 when Kemp’s water lines battled continuous leaks that drained its water supply during drought conditions, Whitehead unfolded the history behind the voters’ decision.
“West Cedar Creek has the staff and resources to manage the system. It is the only reasonable solution I know of,” Whitehead said. Purchasing water from Mabank’s two-inch line into Kemp’s four-inch lines at $4.10 per gallon, he said, was not a solution. “I hope that’s not the price,” he said. “Council, I wouldn’t want to be in your position if this city runs out of water one more time.”
Allen Spears, owner of the largest business in town, Rugged CCTV, pointed out the impact an unresolved water issue is having on the economic growth of the city. “Our company has attracted two more companies to the area, but they went to Mabank and Forney because of this issue,” he said. “Now, we’re out of space. We’d like to stay and expand but this town needs to grow.” He suggested that this impasse is about “bruised egos and personalities,” and suggested the parties involved get “over it.”
Mayor Laura Hanna Peace responded by denying that her ego was bruised. “This is about protecting the citizens of this city from arbitrary control of their water and future by an entity with no accountability to them,” she said.
Three areas of concern include:
• A $35 surcharge on water bills to pay for infrastructure improvements, without a given time frame or accounting to show how much is being collected and how it is being used.
• Second, the ratepayers do not have representation on the utility board. “I asked for a seat on the board for the City of Kemp and was turned down,” she said. If the city council makes decisions about the city’s utilities, the members are accountable to the voters, she pointed out.
• Thirdly, according to the agreement, WCCMUD was to take over the management of the city’s water utility “immediately after the vote in 2013. That didn’t happen,” she said. The city continued to maintain its system over the past three years.
“There are no provisions in the agreement stating that the city will owe WCCMUD in the event WCCMUD fails to finalize the agreement,” Peace stated. “In fact, the only language in the agreement regarding costs state that WCCMUD is responsible for expenses for maintaining the system immediately following the election.”
However, Peace said the change in plan was motivated by words reported in the newspaper from WCCMUD’s general manager during an Oct. 16 utility board meeting recommending to the board that it “pull out” of the deal and “just sell them water.” That statement showed that the city’s water supply was vulnerable to the decisions of someone else, she said. “We had to make sure that you had water and I had water.”
Peace said the news story caused her to panic. She said she couldn’t get a meeting with WCCMUD until Nov. 30. The outcome of that meeting from WCCMUD was, “we won’t sell you water until these demands are met,” she said, followed by a demand letter.
The City of Kemp had offered a purchase agreement, which WCCMUD refused until the city agreed to reimburse the utility for expenditures that were neither discussed with the city, approved by the city nor provided for in the agreement, Peace outlined in a social media post called The Mayor’s Page.
“We are not in breach of the agreement,” she said, “not at all.” From that point, she said, an immediate meeting with utility director Luis Valentine and city administrator Regina Kaiser, revealed the city could make its own water. As a backup, an agreement to purchase water from Mabank was also established.
“So, on Dec. 20 when we got the call – a day early — that we were to turn the valve off, we were ready,” Peace said.
Consultations with the Heritage Institute of Sustainability’s Valerie Shoup, with whom the city has a working relationship, led to an agreement with engineering firm Alan Plummer Associates, Inc. to design a phased plan to build a new water plant. All this came to light during the Jan. 10 Kemp City Council meeting. In addition, the council agreed the city make every effort to procure grant funding with various federal, state and community sources.
She said estimates for constructing a new water plant are between $800,000 and $1.5M to provide service for 20 years with enough to sell to Becker-Jiba, which has expressed the desire to buy water from Kemp. Another $350,000 is needed to replace the major water lines, she added.
“The city’s water rights are the most precious possession the city has and I’ve been encouraged to protect them,” Peace said. “I don’t have any intention of doing something without explaining it first, but we had to move fast.” She assured those in attendance that the city has someone with a Class B water certification and that the city has options now that it didn’t have three years ago.
“We have to take care of ourselves. We are competent to handle our own water,” Peace said. “We have plans now, that we didn’t have before. We have options. If we transfer our (water) rights, we are at their mercy.”
Councilman Barry Lummus pointed out the city has “potential.” The problem has been the infighting, mistrust and untruths. “We need your support,” he said. “West Cedar Creek stepped up when we needed them most, but only for a moment and I appreciate what they did.”

Mayor’s Page-Laura Hanna Peace
Water rights are extremely valuable. West Cedar creek MUD failed to meet its obligations under the agreement between the city and WCCMUD. The agreement states that WCCMUD will take over the city water department IMMEDIATELY following the passage of the vote which occurred in 2013 allowing the city to negotiate and sell the system to WCCMUD. WCCMUD did not do that.
The city continued to maintain our system over the past three years. There are NO PROVISIONS IN THE AGREEMENT STATING THAT THE CITY WILL OWE WCCMUD in the event WCCMUD fails to finalize the agreement. In fact, the only language in the agreement regarding costs state that WCCMUD is responsible for expenses for maintaining the system IMMEDIATELY FOLLOWING THE ELECTION. Also contained in the agreement was a much debated $35 SURCHARGE that WCCMUD planned to charge City of Kemp customers indefinitely. The city asked for accountability regarding how the surcharge Kemp citizens had to pay was used and we were told by the WCCMUD manager that they simply were not going to agree to that. It was a huge concern. So when the manager says in October 2016 (out of the blue…) that he recommends pulling out of the deal, we realized that there are serious issues to be addressed before moving forward.
As suggested by WCCMUD, The city of Kemp offered a purchase agreement to WCCMUD. WCCMUD refused to sell us water until the city agreed to “reimbursement” of expenditures by WCCMUD that were neither discussed with the city, approved by the city nor provided for in the agreement.
At that point it became very clear the city needed to look beyond WCCMUD to insure our citizens water. We increased the amount of water produced at our water plant and also entered into an agreement with the city of Mabank to purchase water to subsidize our plant when needed. We hired an engineering firm, developed a plan and are applying for grant/loans to fund the $800,000 to $1.5m cost for new plant with capacity to meet our current needs as well as our projected needs into the future. Until we receive the responses on those applications we do not know how much will be grant and how much will be loan. But what we do know is that the investment will be made into the property of the city of Kemp, and not into another entities bank account. We need to be in control of our water rights. After three years of waiting for WCCMUD to take over it became clear that we could maintain our own water system and not give away the most valuable asset the city possesses.
Had WCCMUD upheld its end of the agreement, all of this would be moot– they would have been collecting our payments including the $35 surcharge for the past three years and we would have no control or input into the water system in our own town; we requested a seat on the WCCMUD board and were denied.
This is a very serious matter, once water rights are passed on to another entity it would be difficult to impossible to regain them. It seemed prudent to put the brakes on the agreement and re-evaluate. Some may disagree. But it feels wrong to give control over our water system to an entity over which our citizens have no voice. There are those who will criticize and find fault, the council respects individual opinions. We carefully considered the vote taken by our citizens and weighed that against the risks of allowing WCCMUD to control our water without our citizens input and decided to halt the process.
This was acted on at a duly posted and open city council meeting. These decisions are not made lightly or without serious consideration by the council. This is a hard job. I ask that you pray for our council members as we try to make the best decisions based on the information that we have. We all live here and will live with the same consequences as everyone else; so, we are working hard to be sure the City of Kemp’s best interests are served. Thanks for reading this far. I am trying to be as complete as possible but might have missed a point or two. I ask for your indulgence, I’m typing this on my phone and it feels like I’ve written a book! I just hope I’ve answered a question or two.