Conroe - Montgomery Edition - May 2022

WATER

Conroemayor praises ‘victory’ in water usesuit; SJRAplans toappeal

LEGALWATERS The city of Conroe praised an April 21 opinion from the Ninth District Court of Appeals regarding a yearslong dispute with the San Jacinto River Authority.

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BY JISHNU NAIR

Montgomery County’s Lone Star Groundwater Conservation District enacted limits on groundwater pumping in 2008, before the ground- water district’s board was changed to an elected membership. The con- tracts would allow the SJRA to draw surface water from Lake Conroe, treat it, and sell it to cities and utilities in Montgomery County, according to the SJRA’s website. The Ninth District Court noted the SJRA could legally set rates that allowed it to repay bonds used to finance the GRP project. Case background According to the Ninth District Court’s opinion, the April 21 ruling stemmed from a March 2019 suit filed in Montgomery County’s 284th District Court against the SJRA by six private water and sewer companies: Quadvest, Woodland Oaks Utility, Everett Square, E.S. Water Consolida- tors, Utilities Investment Co. Inc. and T&WWater. The private companies alleged the SJRA had charged excessive pumping fees, violating the GRP contract provision requiring pumping fees to be set at a rate that neither benefited nor punished the consumer. The SJRA filed an appeal and a cross-claim against Conroe and Mag- nolia—although the cities were not named in the original suit, according to the Ninth District Court—in March 2020. The river authority asked for a waiver of the cities’ governmen- tal immunity—a legal protection from lawsuits in the Texas Local Government Code—alleging Conroe and Magnolia breached their GRP contracts for fiscal years 2017-20. In a press statement, Quadvest CEO Simon Siqueira celebrated the April 21 ruling. The six water and sewer companies were not named in the SJRA’s March 2020 cross-claim. “While Quadvest was not directly involved in this lawsuit, the results tell us what we have been saying for years—the cities of Montgomery County and Quadvest will resolve this water tax issue, and we will prevail,” Siqueira said. Quadvest also said in its statement

The Ninth District Court of Appeals in Beaumont issued an opinion April 21 upholding a lower court’s decision against the San Jacinto River Authority. The memorandum opinion, delivered by Judge Leanne Johnson, found the river authority failed to mediate with the cities of Conroe and Magnolia before filing suit to collect payments through its Groundwater Reduction Plan contracts. The opinion upheld a decision made in Montgom- ery County’s 284th District Court. Conroe Mayor Jody Czajkoski praised the decision in an April 27 statement. “This is a monumental victory for the water users of this city, and we are happy to say we have $4.8 million coming back to help, and your mayor and council will continue to fight for our customers,” he said. The SJRA confirmed in an emailed statement to Community Impact Newspaper on April 21 that the river authority will attempt an appeal to the Texas Supreme Court. “We disagree with the court’s reasoning, and we’re obviously dis- appointed with the ruling because it just prolongs the process of collecting the unpaid amounts that are owed under the contract,” SJRA General Manager Jace Houston said. “We’ve been in discussions with Conroe for many years, and we will obviously continue those discussions while we appeal the court’s decision.” The SJRA is one of 10 river authori- ties created by the state Legislature to develop water supply and wastewater management in the San Jacinto River Basin, excluding Harris County. The SJRA is a nontaxing entity, according to its website. Conroe City Administrator Steve Williams said in an April 27 statement the $4.8 million in question could help the city continue its mainte- nance of its own water infrastructure. “The money could go straight back to improving the water and sewer systems and relieving the rate pressure for our customers,” Williams said in the April 27 statement. The Groundwater Reduction Plan contracts took effect in 2015 after

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2015 The Groundwater Reduction Plan

contracts take effect after the Lone Star Groundwater Conservation District placed limits on groundwater pumping in 2008.

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March 2019 Six private water and

sewer companies file suit in Montgomery County’s 284th District Court against the SJRA,

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alleging the SJRA charged excessive pumping fees.

March 2020 The SJRA files a cross claim

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alleging the cities of Conroe and Magnolia breached their GRP contracts for fiscal years 2017-20. March 2020 The Texas Supreme Court rules in a separate case filed by the city of Conroe that the SJRA’s GRP contracts were “incontestable and valid.” of Appeals upholds an earlier ruling from the 284th District Court that the SJRA failed to mediate with the cities of Conroe and Magnolia before filing suit to collect payments through its GRP contracts. The SJRA plans to appeal. April 21, 2022 The Ninth District Court

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SOURCES: SJRA, NINTH DISTRICT COURT OF APPEALS, 284TH DISTRICT COURT/ COMMUNITY IMPACT NEWSPAPER

that it will continue to not pay the SJRA its GRP fees and that the money will be set into a separate account in the hope of being able to refund customers. COMMUNITY IMPACT NEWSPAPER • COMMUNITYIMPACT.COM