Who’s Foisting Who?

Certain things I can’t just leave alone.

On July 31st, there was an article posted on WoodlandsOnline.com by Margie Taylor with the headline, “Quadvest Sets Record Straight With Truth,” which can be found here: https://bit.ly/2YHeeIz. A quick read of the article reveals very typical ‘SJRA is a monopolist and profiteering off of water’ talking points. Ordinarily I can ignore an article like this but in this case, the posting is trying to come off as a news article but note it was penned by a PR professional (https://taylorizedpr.com/). Ms. Taylor has represented the Lone Star Groundwater Conservation District and I suppose now works for Mr. Sequeira for the purpose of creating this article. In addition, the article was referenced by at least three LSGCD board members on their Facebook pages as ‘good information’ (Directors Prykryl, Hardman and Bouche at https://bit.ly/2MBq30h, https://bit.ly/2Kl0BcO, https://bit.ly/2GKAon3, respectively).

The article starts off with a curious point. Taylor wrote, “Simon Sequeira, President of Quadvest Water and Sewer Utility, is tired of being in the middle of accusations and half-truths between both SJRA and LSGCD.” Recall that at least $236,000 was contributed to elect the current directors sitting on the Lonestar Groundwater Conservation District board. The dollars were provided by Restore Affordable Water (Simon Sequeira, president), Quadvest (Simon Sequeira, president), Mr. Sequeira himself, and several private water utility owners (see our post from October 2018 @ https://bit.ly/2MEVLdl).

Simon was literally a ring leader in the drive to transform this board. He’s certainly achieved many of his objectives, like dropping the lawsuit between Conroe and LSGCD, removing groundwater limits from the district management plan, and getting Quadvest-friendly hydrologists hired by the board for the purpose of informing and guiding their water management policies (recall Bob Harden spoke to the new LSGCD board on November 20, 2018, on “behalf of Quadvest” and Mike Thornhill was the resident Hydrologist for all Restore Affordable Water radio shows, both of whom are now contracted by LSGCD). The last thing Simon should be complaining about is being in the middle of all of this. He put himself there, after all.

But giving the author the benefit of the doubt, we will analyze the comment to mean that he’s tired of “half-truths” from the SJRA.

The article later quotes Mr. Sequeira as saying, “the cost of water in Montgomery County has skyrocketed because of the SJRA scheme to foist surface water onto its residents. Quadvest just wants what is right and fair for our customers!”

What the heck is foisting? The new buzzword in MoCo politics, it seems. Webster’s dictionary defines it as follows: “a) to introduce or insert surreptitiously or without warrant, b) to force another to accept especially by stealth or deceit.” Foisting sounds pretty bad – evil even. So let’s take a look at the claims of the article to test them for foistyness (I’m pretty sure I made up that variant of the word).

The Claims I’ll deal with here:

  • The SJRA is profiteering: “Water consumers were told by SJRA that they would offer fees of their groundwater at a lower rate than surface water fees. However, groundwater pumping fees were set at a much higher rate than should have been charged resulting in a profit for SJRA.”
  • The SJRA is overcharging groundwater users: “Under those contracts [GRP contracts with the SJRA] LVGUs [Large Volume Groundwater Users] were forced to pay millions of dollars in overcharges for surface water…”

First, by way of background, the following is my very quick summary of the origin of the GRP (Groundwater Reduction Plan) that is the target of this article.

The SJRA set up the GRP program as a response to the LSGCD requirements set originally in 2003. That plan declared that the “amount of useable groundwater available from the Gulf Coast aquifer is estimated to be 64,000 acre-feet per year.” It was based on an aquifer recharge rate of 1.1 inches per year. The plan said the “District shall seek to limit production of groundwater from the resources within its boundaries to a sustainable level so that the groundwater resources of Montgomery County are not depleted from future generations. [source: Lonestar Groundwater Conservation District, Groundwater Management Plan, Adopted October 14, 2003].

In 2010 the LSGCD refined the plan further. In that year, the board noted that the district was to use 79,654 acre-feet of water (which would use 14,654 more acre-feet than could be refilled – according to the management plan). Based on population water demand projections, the board noted that by 2020, there would be a demand for 47,619 more acre-feet than could be refilled and a 290 percent increase from 2010 to 2060. Thus, the board passed a requirement to reduce groundwater usage to the 64,000 level by 2016 [source: LSGCD Groundwater Management Plan, re-Adopted November 12, 2013]. This was the basis for the requirement for large-volume groundwater users in Montgomery County to reduce their groundwater usage by 30%.

You could comply with the rule by reducing your consumption by 30% or finding an alternative source of water (or both). The SJRA came in with a proposal to offer surface water within Montgomery County. Users close to Lake Conroe could accept a pipeline connection to a surface water conversion plant to augment their groundwater supply with converted lake water. Communities, where that sort of connection was impractical like those served by private utilities like Quadvest, could join the same group of users who would then collectively reduce their groundwater by 30%. For example, The Woodlands could go down in groundwater consumption by a value greater than 30% so that outlying areas could continue to consume only groundwater, but the net effect is a reduction in line with the mandates.

In this process, the SJRA raised the money to pay for the plant through the issuance of $500M of bonds (bonds that MUST be repaid). This debt is paid by the collection of fees (surface water conversion fees) from each member of the GRP.

So back to the claims above.

Claim: The SJRA is Profiteering

The SJRA is a non-profit entity (its founding documents are here: https://www.hcfcd.org/media/2426/sjra-master-plan-report-1957.pdf). To suggest it is making a profit is contrary to its established operational model.

I have interviewed Jace Houston, SJRA General Manager, several times. He put it very simply in a discussion with me in October of 2018 when he said that the SJRA is a government entity like a school board or a city. The goal, he said, is simply to offer the necessary services at the lowest possible cost.

Additionally, the SJRA GRP budget for FY19 can be found here: https://www.sjra.net/wp-content/uploads/2018/04/Fiscal-Year-2019-Budget.pdf. In FY18 expected revenues were $52,970M and expected expenses were $52,529M. When revenues exceed expenses, the SJRA GRP division builds its Operating Fund, R&R Reserve and Capital Reserve (pages 8 & 10). In FY18 this was projected to $340k. In FY19 it is projected to be $465k. Currently the Capital and R&R reserves are at $0 (page 13).

Claim: The SJRA is overcharging groundwater users.

The SJRA knows what it needs for debt service and operation and management on an annual basis. It then makes assumptions about total water demand, surface and groundwater mix, its operating costs for the coming year and sets a rate for surface and groundwater users to generate the required revenues (this is vastly oversimplified).

To articulate this, see the GRP fees for 2020 [source: https://bit.ly/2Zw2s4S]:

  • Groundwater: $2.73 / 1000 gallons
  • Surface Water: $3.15 / 1000 gallons

If you are an entity (like The Woodlands) that consumes water at a 35% groundwater and 65% surface water mix, your blended GRP fee is $2.88 / 1000 gallons. If you are an entity like Quadvest, however, with no surface water consumption, you pay $2.73 / 1000 gallons. Thus The Woodlands, for taking on a connection to the surface water plant, pays 5% more in fees toward the conversion plant.

To put this in perspective, according to the SJRA (same source as above), the total water usage in 2019 is expected to be 52.72 million gallons of water per day of which 12 million gallons is surface water. The SJRA budgeted $53.2M for revenues from surface water conversion fees for the year. If you set the fee only against surface water users consuming 12 million gallons a day that would translate into a fee of $12.10 to raise the required revenue. This would, of course, be entirely unfair to anyone in such a community. So the rates must be balanced between the groundwater-only users in the GRP and the surface/groundwater users so the burden is distributed.

Back to the article. To say that, “groundwater pumping fees were set at a much higher rate than should have been charged resulting in a profit for SJRA,” is just not grounded in any sort of fact that I’m aware of. Groundwater fees and surface water fees seem to be set under a standard of fairness to the GRP users as a whole: set a discount for groundwater while not unfairly burdening the surface water users simply because they have proximity and scale suited to a connection to the surface water plant.

Was there anything that isn’t debatable in the article? Sure. Mr. Sequeira does say the following about a planned increase in retail water rates for Quadvest customers, “Rates are increased due to SJRA increasing water fees. These increases are the result of actions taken by the SJRA and the old LSGCD, not anything Quadvest has done.”  This, I *think*, was the point of the article as a PR piece for its customers (giving it the benefit of the doubt).

I don’t think the above convicts the SJRA of foisting anything. I do think that this article was a poor attempt for a PR piece to look like a news article and I’m very surprised that sitting directors would read it and conclude that it was worth sharing. To each his own, I suppose.

The Lone Star Groundwater Management Plan Has Changed Dramatically; Meeting this Tuesday

On Tuesday, February 12th, the Lonestar Groundwater Conservation District Board will discuss and entertain public comment on its new, draft groundwater management plan. It was published on Friday, February 8th here. 

A management plan in very simple terms defines the parameters in which groundwater in the Gulf Coast Aquifer in Montgomery County may be extracted and used. The previous management plan set by the now removed board established, among other things, a requirement for all large volume groundwater users (LVGUs for short) to use no more than 64,000 Acre-Feet of water per year. The management goal was to achieve a rate of use which matched its rate of recharge to keep the volume of water in the aquifer constant. In order to hit the target, all LVGUs in Montgomery County had to reduce their groundwater consumption by 30% (the history of which can be found in other articles on this website). 

The new board campaigned on a position that the existing management plan was based on erroneous science and restricted access unnecessarily to groundwater. After hiring new hydrologists and legal representation, the next major step board undertook was to enter into a settlement in an ongoing lawsuit between the district and the City of Conroe, Quadvest, Woodland Oaks Utility, and other large utilities which challenged the validity of the groundwater restrictions. The settlement agreement renders the “following provision of the District’s Regulatory Plan invalid:”

  1. By 2016, each LVGU in the District must meet its Initial Conversion Obligation, which means each LVGU must reduce its annual groundwater production to the greater of either:
    1. no more than 70 percent of its Total Qualifying Demand, which is based upon the LVGU’s 2009 permitted authorization and actually met not less than 30 percent of its Total Qualifying Demand by implementing water conservation measures and/or using an Alternative Water Source; or
    2. 10 million gallons.
  2. For any growth in water demand experienced by an LVGU after 2009 that cannot be met by the implementation of water conservation measures, such increased demand must be met using an Alternative Water Source beginning in 2016, unless:
    1. The LVGU does in fact timely meet or exceed its Initial Conversion Obligation; and
    2. the LVGU’s overall annual groundwater production, when averaged over the 2016-2045 planning period, does not exceed:
      1. 70 percent of its Total Qualifying Demand, or
      2. 10 million gallons.”

The required reduction of groundwater usage by 30% meant that the shortfall needed to be filled by alternative sources. The majority of LVGUs signed up for a Groundwater Reduction Plan, proposed by the San Jacinto River Authority (SJRA) to provide surface water via pipelines to major areas, to allow the group in aggregate to meet the goal. It meant that a development served by Quadvest, for example, would continue to use groundwater while MUD 46 in The Woodlands let’s say increased its surface water use to account for the target of both parties. Both entities would pay an SJRA surface water conversion fee which goes to the repayment of the $400M+ of government-backed bonds which were sold to fund the surface water conversion facility. Again, this is oversimplified but the details can be found on our podcasts.

Based on the settlement, the prior regulations are now invalid (and therefore removed from the current management plan) and must be replaced with new language. The board offers the following text in Section 6 on page 10 of its draft plan:

“In order to comply with the final judgment, the District will strike the regulations from its rules and no longer manage the resources in accordance with those regulations. After notice and hearing, the District will adopt new rule(s) to address the void and unenforceable regulations.

The District will evaluate and monitor groundwater conditions and regulate production consistent with this plan and the District Rules. Production will be regulated, as needed, to conserve groundwater, and protect groundwater users, in a manner not to unnecessarily and adversely limit production or impact the economic viability of the public, landowners and private groundwater users. In consideration of the importance of groundwater to the economy and culture of the District, the District will identify and engage in activities and practices that will permit groundwater production and, as appropriate, protect the aquifer and groundwater in accordance with this Management Plan and the District’s rules.

The District will adopt rules to regulate groundwater withdrawals by means of well spacing and production limits, as authorized in Chapter 36.116, as appropriate to implement this Plan. In issuing new permits or amending existing permits, the District will manage total groundwater production on a long-term basis to achieve an applicable desired future condition.

The District will maintain a monitoring well and subsidence station network that will be used by the District to monitor aquifer conditions over time…

…The District will make a regular assessment of water supply and groundwater storage conditions and will report those conditions, as appropriate, in public meetings of the Board or public announcements. The District will undertake investigations, and cooperate with third-party investigations, of the groundwater resources within the District, and the results of the investigations will be made available to the public upon being presented at a meeting of the Board.”

In section 7, you will find additional details describing the lack of a valid DFC. A DFC is a set of Desired Future Conditions which groundwater policy must support. An example of a DFC would be for the level of Aquifer X to be no more than 10 feet lower after 6 years. In order to test a groundwater management policy, a groundwater availability model is used to determine its effect on the aquifer level (it takes into account the groundwater management policies in surrounding districts that comprise what is called the GMA14). Again – more details in our podcasts. Bottom line, the position of the LSGCD is that there does not exist a valid DFC or groundwater availability model because the settlement of the lawsuit codifies that the prior management policy was invalid. The draft policy states in section 7, “Because the District Board of Directors has changed its policy goal for aquifer management as set forth above and has already voted unanimously to pursue changes to the DFCs that are the subject of the DFC appeal, those DFCs are no longer reasonable.” It goes on to say, “Given these circumstances, the DFCs that apply to the District remain unresolved. Thus, no reasonable DFCs are available for inclusion into this Management Plan. When the District and GMA 14 successfully adopt DFCs that are deemed reasonable, then the District will update this plan.” Last it says, “Because the modeled available groundwater in the district is to be based on the desired future conditions established under the joint planning process, and the District, at present, is working with GMA 14 to adopt new DFCs applicable to the District, the District presently does not have a justifiable value for the Modeled Available Groundwater for the District’s regulatory purpose.”

Why does this matter? The draft management plan for review does not actually have a management plan. Rather it states how the board will develop its plan when it does and offers the triggers for when it will develop one in full (stated partially above).

So, what does all of this mean? I *think* it means that because of the settlement, the following things are true:

  1. The board will no longer regulate large volume users in the same way (through pumping limitations).
  2. The board will implement some sort of well spacing policy and define fair use. This will give landowners sufficient information (I think) to value their water rights. The permitting process will change to support this.
  3. Once the board deems a reasonable DFC has been set by the GMA14, it will respond with any needed additions to its management plan.

The board is acting consistently with the viewpoints expressed by each candidate and Restore Affordable Water during the campaign. The new hydrologists, Bob Harden, and Mike Thornhill hold views that are demonstrability different from those of the prior board and other hydrologists. They indicate that wells given proper spacing do not interact with one another and that the aquifer is essentially (my interpretation of their words) infinite with regard to informing regulatory policy. Right or wrong, these views will inform the district’s policies moving forward.

I can also tell you with no uncertainty that contrary voices are not being heard by the board whatsoever in public comments. Why? Not because the board is stifling them but rather no one is actually coming to the meetings to voice concerns. Instead of discussions about water policy or science, the most heated public debate so far has been over the use of public monies to hire a lobbyist to represent the district in Austin. At the very least, I hope that other views and opinions might be shared by the public to ensure at least the board has access to any and all information from the constituents and make the best possible decisions.

Lonestar Groundwater District Approves Settlement Offer with City of Conroe et al

During Tuesday’s Lone Star Groundwater Conservation District board meeting, the board announced that they have agreed on a settlement offer in the case brought by the City of Conroe et al against the Lone Star Groundwater Conservation District. The specifics of the settlement will not be made public until all parties have reviewed and signed it.

When asked about how the settlement will impact the board’s ability to regulate groundwater usage, President Webb Melder directed me to the ‘Courier article describing the ruling back in October.’ That article is entitled, “Judge rules LSGCD acted outside its authority to reduce water usage in Conroe” and can be found here: https://bit.ly/2FStCvX.

The article quotes (Conroe) city attorney Marcus Winberry describing the ruling issued by Visiting 284th State District Judge Lamar McCorkle on September 18th as follows:

“The now invalid rule severely limited groundwater pumping throughout Montgomery County and forced large volume groundwater users to enter into costly Groundwater Reduction Plans to replace the lost groundwater with an alternative supply,” said City Attorney Marcus Winberry. “As a result, Conroe water customers have seen rates double and millions of dollars have been paid to the San Jacinto River Authority in its capacity as the operator of the GRP. Prosecuting this lawsuit against the Lone Star District has been part of the Conroe City Council’s continuing effort to challenge the Lone Star District’s and SJRA’s actions that have inflated water prices in Montgomery County.”

The board’s actions to-date, obviously, suggest that it intends to unwind current groundwater regulations. The question mark is how exactly the board will write its new groundwater management plan. Based on the news of the settlement and Board President Melder’s reference to the article, it can be concluded that the board intends to eliminate the groundwater usage limitations which created the need for the Groundwater Reduction Plan (GRP). The GRP provided a path for large-volume water users to meet a requirement to reduce groundwater usage by 30% through a partial conversion to surface water.

Harry Hardman, on his director page on Facebook, announced the settlement saying, “Tonight the LSGCD board voted unanimously to approve the settlement agreement between the District and the City of Conroe and several Large Volume Groundwater Utilities, subject to approval by the plaintiffs. When approved, it will put an end to the needless litigation defending the indefensible, which has resulted in almost $1.8M of expenditures of the taxpayer’s money over the past 3 years.” The full text is here: https://bit.ly/2B24QpN.

The specific discussion regarding the settlement is found on our recording of the board meeting here: https://youtu.be/ntvVXBsNP2I?t=848.

LSGCD Special Board Meeting November 16, 2018

We at the Side of Reason will continue to track the actions of the Lone Star Groundwater Conservation District. The board met Friday for a Special Session to certify the results of the recent election, swear in the new board and elect the new officers. State Representative Metcalf was present to do the swearing-in as was an aid for State Senator Brandon Creighton. The details of the meeting follow.

Just before the results of the election were certified, any present, outgoing board member had a chance to say a few words.

Scott Weisinger complemented GM Kathy Turner and her staff, praised the working relationships on the board, and indicated that the biggest challenge the board faces going forward is that ‘folks outside of the county have control over groundwater and Montgomery County needs its own voice.’ I assume but do not know for sure that he meant that the GMA14 sets desired future conditions for the aquifer that Montgomery County must support.

John Bleyl indicated that he enjoyed working with the board and he thanked the staff and warned the new board that they face a learning curve. Webb Melder said that the Groundwater Conservation District is an ‘ongoing chapter in his life’ and that we will ask each board member to ‘talk to the Lord’ and that there is much work to do. He praised Representative Metcalf who he said, “gave the district back to the people and took it out of the hands of appointed directors.” Gregg Hope thanked the staff and indicated that he loves Montgomery County very much.

The candidates were then sworn in by Rep. Will Metcalf and took their places at the front of the room for the next part of the meeting.

First, the board selected its officers. Each position only had a single nomination, and all were unanimous votes. Webb Melder was named president, Harry Hardman as Vice President, Stuart Traylor as Secretary and Jim Spigener as treasurer.

No decisions were permitted to be made at the meeting because no agenda items were previously set for today’s meeting. So, the board did what it could do: set future agenda items. The floor was opened up for comments for future agenda items. Melder asked many present by name to offer thoughts. He called on the new board members, LSGCD GM Kathy Jones, Representative Metcalf and Bob Harden, a water engineer who has been in the business for decades.

Rep. Metcalf declined to offer suggestions but indicated that he has ‘an open-door policy for the board.’ Kathy Jones, GM, suggested that the board be open to hearing presentation(s) about groundwater and indicated that the board will need to adopt a budget for 2019 as the previous board did not close on one. Jones also suggested an executive session for a briefing on the ongoing lawsuits. Hardman asked that they discuss an audit before closing on a budget. Larry Rogers and Melder want to review the bylaws. Larry Rogers suggested they do some sort of communication to the employees [editorial comment: presumably many believe their jobs are in peril]. Melder indicated that they will need to review the management plan, regulatory plan, and rules.

Melder then called on Bob Harden. Who is Bob Harden? As previously mentioned, he is an engineer who participated in a summit put on by Quadvest on September 11, 2018 entitled “Are We Really Out of Water? A Summit on the Future of Groundwater in Montgomery County.” He has testified in Austin for Senate Bill 1392 which seeks to amend the Texas Water Code to change the way aquifers are managed. The bill, among other things, eliminates 36.101c(3) which says that groundwater districts may make and enforce rules that “consider the public interest in conservation, preservation, protection, recharging, and prevention of waste of groundwater, and of groundwater reservoirs or their subdivisions, and in controlling subsidence caused by withdrawal of groundwater from those groundwater reservoirs or their subdivisions, consistent with the objectives of Section 59, Article XVI, Texas Constitution.” He is also on the board, which Webb Melder chairs, of the Texas Association of Groundwater Owners and Producers who offer the following services:

  • To increase the availability of professional expertise and information regarding groundwater production and associated private property rights
  • To promote substantive, non-partisan input on the impact of the groundwater production industry on the both the state’s future economic development and the ability to meet projected water needs
  • To facilitate the development of a groundwater policy that will address Texas’ water needs for the 21st Century
  • To facilitate development of infrastructure to move groundwater from point of source to point of need
  • To facilitate the creation of groundwater markets

Numbers four and five should jump off the page: moving groundwater from point of source to point of need and the creation of groundwater markets.

In his comments to the board, Bob called it a “remarkable day” in that replacing an entire board in one go hasn’t happened before, especially in a place like Montgomery County with a “mature groundwater condition.” He described some of his personal history in working with The Hickory Underground Water District and the city of San Angelo in 1992 (now I believe the Irion County Water Conservation District), and in the mid 1990s with the city of Amarillo. Then he mentioned that in the early 2000s he worked with Post Oak Savannah and Gonzalez Counties which were groundwater districts that had just formed and they had to create rules. Bob provided professional services to assist in the creation of their rules and specifically mentioned, ‘they have export programs [established] in those districts without litigation.’ He told the board that they are getting put into a frying pan with controversy and challenges. Other districts have worked through ‘stuff that allows districts to regulate without lawsuits’ as long as you are doing things fairly and impartially with science and monitoring.

It is interesting that Bob would mention a) exporting specifically and b) that he offers professional services to help right groundwater rules. We’ll have to wait and see if this current board hires Bob for this purpose. In the meantime, we did some cursory checking on the export programs in the rules of Post Oak and Gonzalez.

Post Oak: (from Section 8.1 “General Provisions for Transport”, ):

The District may not impose more restrictive permit conditions on the owner of a transport permit than the District imposes on existing in-district users of water. The District may impose a reasonable fee for processing an application under this Rule. The fee may not exceed similar fees that the District imposes for processing other permit applications.

The Post Oak Savannah fee schedule for production and transport of water is zero-point-eight-five cents per 1,000 gallons.

Gonzalez County Groundwater Conservation District (from Rule 15 “Exportation of Groundwater from the District” Sections B & F):

An export permit, as provided for herein, is not required if the export of water commenced prior to the November 26, 1997, the registered pumping capacity of the facility as of November 26, 1997 is not increased, and annual aggregate amount of water to be exported does not exceed 5,000-acre feet.

Permittees shall pay a fee to the District equal to 2.5 cents per one thousand gallons for the water exported from the District in the preceding month.

And what is the export and transport language from the Lone Star Rules (rule 9.3 “Groundwater Transport Fee”)?

The District shall impose a reasonable fee or surcharge, established by Board resolution, for transportation of groundwater out of the District using one of the following methods: (a) a fee negotiated between the District and the transporter; or (b) a fifty percent (50%) export surcharge in addition to the District’s water use fee for in District use.

50% is heavy relative to these two other districts. The baseline fee for water use is 10.5 cents per one thousand gallons and the export surcharge of 50% brings that to 15.75 cents per 1,000 gallons.

So at least we know that the rules that Mr. Harden apparently wrote for two conservation districts for export / transfer fees and restrictions that are significantly lower than those of the Lone Star GCD. In addition, we know that the extraction limits (64,000 Acre Feet per Year) forced a move to surface water for the GRP. Neither condition is conducive to creating a mining and transport business for groundwater in Montgomery County. If you want to monetize the aquifer, you must in a practical manner eliminate extraction limits and remove margin hits like transport fees. We speculated on this in our “Wargames” article.

Melder then closed by indicating that he wanted to look at “well spacing” and “well monitoring.”

As always we will continue to watch the actions of the board so that you have an opportunity to stay current should you choose to do so.

Update: The post link contains the month of “April” when it should have said “November.” The article does refer to the meeting on November 16th. 

Update December 11, 2018: Bob Harden approached me after the Lone Star Groundwater Conservation District Board Meeting and offered a correction to this story. Bob indicated that he played no role in writing the district rules of exportation (or any other rules) as referenced above. He indicated that he merely acted as an advisor to the boards.

Let’s Wargame: Growing a Private Water Utility When Constrained by Aquifer Regulations

In our podcast episode 4, “Hitchhiker’s Guide to Our Local Water Wackiness,” we gamed out how you might grow your revenues if you were a private water utility in a groundwater district that limits groundwater extraction. This is a hypothetical “wargaming” exercise but has been tested with people that definitely understand the landscape.

1. Own a significant matrix of wells over the largest aquifer in the state of Texas.

2. Lobby for legislation to move to an elected, rather than appointed, board for the Lone Star Groundwater Conservation District.

3. Start a 501(c)4 and work with the Tea Parties to promote candidates running on personal property rights, transparency, elimination of waste, and lower water bills – things right in the wheelhouse. Highlight the ineptitude, waste and incestuous relationships of the current board with a monopolistic surface water supplier.

4. Succeed in electing a new board that will elminate, reduce or fundamentally redefine extraction limits in the aquifer. Perhaps the board reduces or eliminates export fees. Ideally the board will drop its appeal in Conroe et al vs. LSGCD and effectively acknowledge that it cannot regulate “large-volume groundwater users to reduce how much groundwater they use annually.

5. Use the new extraction limits as proof that the SJRA surface water treatment plant was not necessary and that $400M of public bonds to build the plant were improperly issued.

6. Private operators withdraw from or reduce payments to the surface water GRP which goes, in part, to pay the principal and interest on the bonds.

7. SJRA sues the entities that exit the GRP and raises rates to those who remain to make up for the lost revenue and increased litigation costs. The Woodlands would likely take the brunt. This further agitates the voter base. Letters to state representatives are written.

8. Win a decision in the Supreme Court that the SJRA bonds were improperly issued. Create a a $400M public debt crisis for the Texas Legislature.

9. An investment group appears and offers to take over payments to the SJRA for the bond debt in exchange for water extraction rights. The Texas Legislature, behind a demanding voter base, passes legislation to reduce groundwater regulation in some meaningful way.

10. Create a groundwater supply footprint capable of supporting new developments and the exportation of water monetizing billions of dollars of water in the aquifer.

The President of Quadvest, a private water utility, is also the Chairman of Restore Affordable Water. Since it is a 501(c)4 and not a PAC, its contributors (investors?) will never be made public. Wouldn’t it be nice to know who, exactly, is supporting the efforts to elect candidates that may very well believe that the Lone Star Groundwater Conservation District uses “Junk Science” to set water policy (Hardman shared article on campaign page); used a massively incorrect recharge rate to set policy (Bouche comment); along with the SJRA is running a “fear and propaganda campaign” (Prykryl share on campain page)? Or a candidate that believes the SJRA is scaring “people into thinking we will fall into the ocean if we keep pumping groundwater” (Spigener on his campaign page)? And candidates that flat-out oppose regulations (Melder share on campaign page, Rogers in a MCTP vetting video)?

Restore Affordable Water has purchased airtime on Lone Star Radio. On October 9th, Simon had as his guest Mike Stoecker who is a “water ultility provider in the Montgomery County Area.” He has Simon’s confidence. In response to Simon’s question, “if you were on the board, what is the first thing you would do?” Mike responds, “I don’t know if I want to tell you that on the air because it would give away the gameplan.” To which Simon answers, “yep.” Here is the video but you have to slide to 47:45 to hear the exchange.

As president of Quadvest, Simon Sequeira owns (among other things) their corporate growth strategy. In addition, Quadvest’s corporate Vision Statement states the following:

By the year 2025, we will be serving no less than 100,000 customers with operational excellence. By the year 2035, we will be the First Choice wholesale and retail utility provider in Texas. First Choice means: First in employee and customer satisfaction; First Choice Partner for Developers, Engineers, and Lawyers.

It is safe to assume that Quadvest cannot achieve a vision like this without access to groundwater.

Vote as you wish… of course! No one in Texas will fault anyone for voting for personal property rights or economic growth. Just do it with your eyes wide open and know that you are not voting for your water bill to go down (we tackle that one in podcast episode 3).

You may want to stop and consider candidates that believe in local groundwater management, managing subsidence, protecting small well owners, regulating aquifer levels, controlling the cost of well development, and enabling the development of viable groundwater alternatives in the face of signficant population growth. Or not. But make it about that. Again, not your water bill.

Incidentally, Side of Reason believes that no matter what, phases 2, 3 and 4 of the SJRA surface water treatment plant must be delayed until a prudent time according to the water demands of the county. This action does not require a RAW slate.

Screenshots of cited information not otherwise linked above:

Episode 4: Hitchhiker’s Guide to Our Local Water Wackiness

Your water bill can’t go down measurably with a new LSGCD board, but could it go up? We explore that and analyze bigger issues that could be in play while a 501(c)4 organization, Restore Affordable Water, advocates for more limited water regulation in a Tea Party-driven county.

Episode 3: Water 101 – Raw Truth

Can an elected board for the Lone Star Groundwater Conservation District lower your water bill? We describe the components of cost in your water bill and show that the board itself can do very little to directly lower yours.

In Our Defense

We had an interesting exchange this week with a candidate for Lone Star Groundwater Conservation District in which our character was called into question. After we responded, the entire post was deleted. Since the disparaging comments were available to the public for hours and our response was only available for a few minutes, we offer them here.

The following transcript is derived from screen captures of the discussion. We note the two locations below where the screen captures were not complete. The screen captures are provided for substantiation and any errors are not intentional.

Jon began by shared an article from The Golden Hammer with the comment, “Great information here.”

Side of Reason 

As a person running for public office, we take articles that you share as a window into your point of view unless you state otherwise. Two Questions:

1) Are there any elements of this article you do not agree with or find misleading? If so, which elements?

2) Would we expect your policy choices in office to match the last sentence of the article? “Citizens will have the direct ability to turn the spigots of junk science and needless regulations of private water property rights off forever.” (note: the words in italics were not captured in the screen caputre)

Jon Paul Bouche for Lone Star Groundwater Conservation District Place 3 
I said there was some great information. If you take exception to some part of that article, let’s discuss it. The recharge rate as stated by the USGS is, in fact, six times greater than the recharge rate used by the LSGCD when they were putting together their models. (note: the words in italics were not captured in the screen capture)
Side of Reason 

The study that you and Mr. Yollick cite was published in 1996 and did in fact yield a recharge rate of 6 inches per year but for limited parts of the Chicot and Evangeline aquifers. The deep Jasper aquifer, which is a major source of groundwater for the district was not included (over 500 ft deep – http://bit.ly/2EbTJib).

The Study used tritium as a ground-water tracer in outcrops in a 2,000 square mile area in Harris, Montgomery and Walker counties. The depth of the study was limited to the water table at a depth of 10 – 75 feet because, “the seismic-refraction method was applied in the study area is not reliable for detecting water tables deeper than about 75 ft.” The entire study can be read here: https://on.doi.gov/2R10afl.

Mr. Yollick indicates in his article that “The United States Geological Survey (USGS) is the foremost geological survey in the world. It has remained non-political and operates almost entirely as an independent organization within the United States Department of the Interior.”

If we can agree that the USGS is an important source, then it is certainly worth looking at other studies that they may have published.

One is the 2004 report entitled, “Hydrogeology and Simulation of GroundWater Flow and Land-Surface Subsidence in the Norther Part of the Gulf Coast Aquifer System, Texas” (http://bit.ly/2yt8FIZ). Another is the 2013 report entitled, “Estimated Rates of Groundwater Recharge to the Chicot, Evangeline, and Jasper Aquifers by Using Environment Tracer in Montgomery and Adjacent Counties, Texas, 2008 and 2011” (https://on.doi.gov/2pPGjy5). These yield a wide variety of results with a wide variety of sizing and location conditions:

  • Chicot and Evangeline in aggregate: 7in/yr and 0.4 in/yr
  • Evangeline and Jasper in aggregate: 2 in/yr and 1.2 in/yr
  • Chicot: 1.3 in/yr and .2 to 7.2 in/yr
  • Evangeline: 1.2 in/yr, 1.5 in/yr, 0.5 in/yr and 0.1in/yr
  • Entire Gulf Coast Aquifer in aggregate: 0-1 in/yr, 0.12 in/yr, 0.25 in/yr, 1-2 in/yr

The article you share cherry picks a high recharge rate and excludes a major aquifer. Using a 6 in/yr recharge rate to set extraction limits effectively deregulates the use of groundwater. It is important for voters to know now – not after entering office – what mindset each candidate will us in setting policy especially given the volumes of information available right now.

Jon Paul Bouche for Lone Star Groundwater Conservation District Place 3 

As I state above… “I plan to look at all of the information that is available and consult with hydro-geologists to ensure that the best decisions are made.”

Jon Paul Bouche for Lone Star Groundwater Conservation District Place 3 

I understand there is competing science here and people want to pick and choose which report says whatever they agree with. It would be senseless to get into a debate with you about which report has more weight in this discussion. Ultimately, the board will have to sit down and discuss all of these reports and make the best decision and this what I plan to do if elected.

John Paul Bouche for Lone Star Groundwater Conservation District Place 3 

Scott. You and your wife Andrea did a webcast about the new Montgomery County Republican Party bylaws a few weeks ago and there was just a lot of misinformation in that webcast. Even though we are FB friends and my phone number is easily accessible, prior to that webcast you did [not, sic] bother to reach out to me before calling me out in your webcast. Then after doing a bit of research into who you and your wife associate with, it all made sense. It just seems to me that if you were really interested in getting the information right, you would have spoken with someone who was involved in the process before doing your webcast. That is why I sent you a message after I saw your webcast. If you are going to put yourself out there and do a webcast, I think it is important that you at least make an honest effort to get the information right.

Subsequently, when the SREC voted 64-0 against your position on the new bylaws, instead of having the character to accept the truth and desist in your approach, you simply did another webcast and imputed motives on the people who were instrumental in adoption the new bylaws. Gotta say…… not cool.

Here is what I think that people need to understand about this situation… … The new bylaws were passed to modernize the party, energize the party and unify a party that has been divided for many years. That’s it. There are no ulterior motives and I will have you know that I voted for Chairman Wilkerson and removing him from office was never discussed.

Over the past 20-30 years, the demographics of Montgomery County have changed considerably and yet the MCRP has not evolved much at all, that is until these new bylaws were adopted. The changes were needed and we have made great progress even though we continually have to deal with people who have dispensed with logic and reason and continue to make specious emotional arguments to try and further divide the party. I would welcome your efforts to help unify the party but thus far, I have not seen that from you.

In closing, I will say that your interest in my race for the Lone Star Groundwater Conservation District is certainly not coincidental. Of all of the races going on in November, you have suddenly taken a keen interest in mine. I have sent you an hour long video explaining pretty much everything you would want to know about why I am in this race. I have told you that I will look at whatever information is put forth and be objective in my evaluation of that information and in the decisions that I will make if elected. So people will have a choice on Election Day. They can vote for more of the same and elect the incumbent which will most certainly maintain the status quo if that is what they want. Or… they can vote for the other guy in the race who has a criminal record (it’s public information so you can do your own research on this.). But if they don’t like those candidates, then they can vote for me. I have over 20 years of training and experience in doing complex audits and investigations all over the United States and abroad. I take pride in the community service that I do and I hope that everyone will do their research before they cast their vote.

We will talk after the election.

Side of Reason 

The Side of Reason is brand new. We released our first podcast, our website and our Facebook page on September 19th. We exist to research topics where we believe that there is missing information in the public view. As you must know, my wife Andrea has been involved in MoCo politics since the road bond in 2015 and she was an instrumental part of the fight to convert the Township seats. The husband side of this operation (me) has literally been active in issues since August 17th of this year.

It was on that day that I saw your Facebook post describing the new committees in the MCRP. I examined the document you provided and I noticed that there were quite a few precinct chairs that were not assigned to committees and I thought that was a bit odd. I wrote to many of them to try & find out why. At the same time I wrote to you on Facebook to ask for a copy of the new MCRP bylaws. I proceeded to study the old and new bylaws and couldn’t believe they could change so drastically and so I started researching. I read the rules of the RPT, the Texas Election Code, Robert’s Rules of Order, statements from Mr. Dickey, legal positions, posts from you, Reagan Reed, and others. I read the bylaws of other counties in Texas. I even read the bylaws from other states! I’ve watched and re-watched the June 26th CEC meeting, attended the August 28th CEC meeting in person and listened to the two SREC hearings involving Dr. Wilkerson.

And so we launched our first podcast with a passionately held point of view and jumped into the fray.

You state in your post that “when the SREC voted 64-0 against your position on the new bylaws, instead of having the character to accept the truth and desist in your approach, you simply did another webcast and imputed motives…”

When the SREC voted, we literally issued a post THAT DAY entitled, “Today’s SREC Meeting Changed the Validity of the New MCRP Bylaws. Here’s How.” In it we said, “We suggest the following: 1) Chairman Wilkerson accept the ruling and abide by the new bylaws. 2) We suggest that the SREC amend the RPT Rule 8e to provide extreme clarity for the process for a CEC to adopt new bylaws (IE match the text in 8C and 8d).” This was to the great disappointment of many supporting Dr. Wilkerson.

Yes, we mentioned you in our podcast… because you are actually literally in the center of this issue and weren’t the only one we mentioned by name.

We knew when we started Side of Reason that the water issue would be our second issue. Why? I noticed the Restore Affordable Water 501(c)4 materials and like anyone I was drawn in because I would like a lower water bill. I read their presentation, “We have a Government Problem, Not A Water Problem.” On page nine, it shows a chart stating that the Gulf Coast Aquifer in Montgomery County has 180 MILLION acre-feet of water and the LSGCD only allows MoCo to pump 64,000 acre-feet of water per year. When I read something like that I think ‘there must be more to this – what kind of entity would allow MoCo to extract only 0.036% of the available water each year?’

So I found out over the last two weeks. I have read USGS reports, SJRA and LSGCD annual reports, the 2003 Groundwater Plan, strategic summaries, the MODFLOW modeling process, LSGCD minutes, GMA14 minutes, subsidence reports, LSGCD bylaws, summaries of lawsuits and appeals. Our filebox grows daily. I watched Simon interview RAW candidates on Lone Star Radio. I watched Erick Yollick’s “Hammer Time” with Mr. Hardman and Larry Rogers. Yes, I even watched your Tea Party vetting interview (I encourage everyone to watch – it is eye opening). I reached out to folks that have served on a MUD. I attended the Chamber of Commerce candidate’s forum. I reached out and met with SJRA and the GM of the Harris-Galveston Subsidence district. I’ve learned how the LSGCD budgets and their sources of income. I learned the nature of the SJRA surface water conversion plan (and its financing) and the SJRA fee on our water bills. I learned about proportional and historic groundwater reduction. I studied the impact of the 64,000 acre-feet rule and why the number was changed to 100,000 (pending adoption of the GMA14). I wrote the GM of the WJPA (he did not respond). I wrote to RAW and literally asked for a meeting with Simon Sequiera (which was ignored). I have other emails queued. And as you very well know, I wrote to you (after hearing your view that I should reach out to those involved before assuming motive). Until you cancelled our meeting today, we were going to meet tomorrow [Friday, Oct 12] at 3pm. It’s in my calendar.

In tomorrow’s discussion, I was going to attempt to understand your policy view and share my concern with you that if the board acts in the way I believe RAW would like for it to and drops the legal appeals process, increases (or abandons) the extraction limit or any number of other *possibilities* that rates could actually GO UP in The Woodlands because of the public debt associated with the surface water treatment plant. In fact, I think that’s what this election is all about: the debt and its repayment through fees to the GRP. As a candidate attempting to represent Precinct 3 (MY precinct) I thought you might want to know this. I was honestly looking forward to hearing where I might be wrong BEFORE we do our first podcast.

Yes – you are in the middle of this one too. You are running for a seat and are endorsed by RAW.

I would have waited to discuss anything on this until our meeting tomorrow but then you shared on this campaign page the very sort of article that got us fighting misinformation in the first place from the Golden Hammer. It states among other things that the recharge rate is really 6 in/yr and not 1.1 in/yr as assumed by the LSGCD. I asked you if you share the view in the article and I gave you a chance to walk yourself back from it and clarify your policy view. Instead you doubled down stating, “The recharge rate as stated by the USGS is, in fact, six times greater than the recharge rate used by the LSGCD when they were putting together their models.” These then became YOUR words which I refuted. You dismissed my post and effectively said, “I will conduct research once I’m in office and make the best decision.’ Voters like me aren’t voting for ‘investigation, audit or research capability.’ We want to know what you’ll do in office. By the way, I actually looked at all of the other RAW candidates to see if anyone else shared the article. If they had, I’d have engaged them as well because I found the article to be so terribly misleading and I honestly couldn’t believe you or anyone else running for office would share it.

After all of this you resorted to a very personal attack on our integrity and character.

You have misjudged our motives in the most severe way. You assume things about us that are false. You believe we have it out for you personally – that you are somehow in our crosshairs. You imply that our associates drive our behavior or points of view. You insult our intelligence and most importantly the essence of who we are. We work in concert with no one but each other. We research the heck out of our topics and present our opinions. We WELCOME being challenged and in fact invite it. We absolutely admit when we’re wrong (we even did so once on September 28th).

We are not who you think we are. Your post is ugly, unwarranted, and unbecoming of a public official.

Update 10/12 – we missed the share of the same article on Harry Hardman’s page. It was also discovered on Richard Rankel’s page who is not a RAW-endorsed candidate. We have since inquired with them – this was an honest oversight

Update 10/18 – since this post, Simon Sequeira and Jim Stinson have reached out to us. It was not our intention to disparage them for not having done so – we were merely trying to represent the scale of our attempted conversations. We are grateful to both.


In today’s espisode, we discuss the latest developments in the dispute over the MCRP bylaws and control of the Republican Party. Specifically we talk about the 8K Rule filing against Dr. Wally,  whether such a ruling has teeth, and that the SREC is partially to blame for getting us here. We also talk about the new bylaws, we compare them versus the old and re-live June 26, 2018 when arguments for and against the new bylaws were made in the CEC.

God bless!

Podcast Correction

As we state in our podcast, we are willing to be wrong and/or corrected meanwhile we continue to immerse ourselves in the study of the MCRP bylaws (old and new), the SREC bylaws, the RPT rules and the Texas Election Code. In this case, we are correcting ourselves after further reading:

We mention in the podcast that the new bylaws do not have a provision requiring the CEC to vote on new bylaws every two years at its organizational meeting and we suggested this was an intentional mechanism to “lock in the bylaws.” While it is true that such language was removed in the new bylaws, it does not exempt the CEC from the RPT rules which do require all CECs to vote on new bylaws at the start of every organizational meeting.

As you see in our posts above, we still assert that the mechanism to vote in bylaws at an organizational meeting can be legitimately disputed and the SREC should address this in a more definitive manner than they have (even in the events of the last 6 days).