Category Archives: Revenue Bonds

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.

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