Water conservation district weighs independence from the county after county attorney challenges its funding

PRESIDIO COUNTY – The Presidio County Underground Water Conservation District scrambled to secure funding for 2022 and beyond during their board meeting last Thursday after County Attorney Rod Ponton raised questions about the board’s current funding coming from county tax dollars. With the water conservation district’s future funding uncertain, they voted to ask their attorney to write a memorandum and discussed a path where the PCUWCD may become a full-fledged, independent taxing entity.

For fiscal year 2022, the district had requested around $55,000 from the county budget. Every year since the district’s creation, they presented and were granted funding from Presidio County’s commissioners.

Trey Gerfers, the board chair of the water district, told the water conservation district board on Thursday, however, that after the county budget workshop, he thought it was likely the commissioners wouldn’t grant money for the new requests of $5,000 for a data specialist, nor money for new well-monitoring equipment.

Not only was the slight budget increase in jeopardy, the entire water district’s budget was at risk, he told the board members to their surprise. At the budget workshop, Ponton had spoken and delivered some alarming news. First, he presented in the capacity as City of Presidio attorney, requesting $100,000 in funds from the county for an emergency clinic in Presidio. Then, in the capacity of county attorney, he announced his belief that it was illegal for the county to fund the underground water conservation district, presenting attorney general opinions in support of his argument.

“The AG opinions stated that when there’s a separate political subdivision such as the PCUWCD, that it’s illegal for a county to fund that district for operations and maintenance,” Ponton explained in an interview this week. “However, a county can do that if it is solely for the purpose of getting the district to organize and start it.”

The PCUWCD was formed by county voters on August 31, 1999, and enabling legislation allowed the district to be a taxing entity. The district could levy a property tax of no more than 5 cents per $100 valuation, but only after another election was held on that question alone. That second election to fund the new water district through an ad valorem tax never took place.

County officials in 1999 told The Big Bend Sentinel they would fund the water district “initially,” since voters had not approved any funding source for the newly formed entity. Twenty-two years later, they are still footing the bill.

Since its creation, the PCUWCD has received annual funding from the Presidio County budget, allocated each year by county commissioners. In the 2021 fiscal year, the board received around $47,000 in funding, which went towards costs like state-mandated reporting and administrative staff support to approve drilling permits and manage monitoring data.

Ponton claimed that the water district has taxing authority, which would preclude it from collecting funding from the county. The issue, he pointed out, was that the water district has never asked the voters to empower them to tax. Before he was willing to advise commissioners to support the district in their 2022 budget, he believed commissioners needed to see a plan by the water district that would put it on a path to becoming an independent taxing entity.

“The county and I want to help the district, because we look at it as a positive thing for Presidio County, however we have to follow the law, and so the district has been in existence for 20-some-odd years and has never addressed this issue. According to these AG opinions, they have to,” Ponton concluded this week.

“It is a little awkward that he focuses on that all of a sudden,” Board Member John Razo said after Gerfers explained the new challenge to the district’s funding. Board members questioned why the issue had been raised, but agreed they would need to take action in response. Ponton said he couldn’t remember who brought the opinions to his attention, but that it was someone within the county.

“This attorney general’s opinion is ancient and based on the idea that if an agency has taxing authority, that the county cannot provide funding to it,” Gerfers remarked at the water district board meeting. Despite the age of the opinion, Gerfers felt the need to reach out to the district’s lawyer for advice.

“Now Mr. Ponton is pushing for us to become taxing, and while I think that there’s definitely the legal authority for us to do that if we were to go to the voters and get them to approve it, I really don’t think that right now is the time to go to the taxpayers and ask them for more money,” Gerfers worried.

He pointed to the high number of property appraisal disputes in the county this year, as residents pushed back on valuations that could impact taxes. He also mentioned that some have political aversions to any new taxes, while many others are still suffering financial hardships brought on during the unprecedented global pandemic that persisted throughout the past year. Razo and Board Member Brenda Witty concurred, hesitating to add any ad valorem tax to the bills of Presidio County property owners. “This is not the time to be trying to tax more,” Razo said.

The district’s lawyer, Mike Gershon, was able to share more recent precedent for funding of water districts by counties. Starr County in south Texas’ Rio Grande Valley had been in a similar situation as Presidio County, and resolved it through an agreement between legislators, the governor, Texas Commission on Environmental Quality, Starr County and the area’s water district, which Gershon helped negotiate.

That agreement said the county could continue to fund Starr County’s water district for a couple years while the board got a proposal on the ballot to fund the district through ad valorem property tax.

The PCUWCD was seriously considering the Starr County’s blueprint at its Thursday meeting, and Ponton said in an interview this week that a plan similar to Starr County is what Presidio County would need in order for him to advise commissioners to fund the water district in the interim, that is, until it establishes its own taxing powers through a public vote.

Gerfers suggested that a “tax swap” could be a solution, modelled off of the path that Starr County was taking. Instead of raising taxes on county residents, the board would propose a ballot measure that would decrease the county’s taxing by a small amount (in Starr County the swap was for .005%,) and raise a new tax for the PCUWCD funding for that same amount, leaving tax payers paying the same amount at the end of the day.

Before any of that could take place, Gerfers said the board would need to work on “educating the public, negotiating the tax swap with the county, and then maybe having a vote on it in two years.”

If the voters grant taxing power to the district, the PCUWCD would be an independent taxing entity, receiving its own funds directly from taxpayers and, rather than having the board appointed by commissioners, voters would directly elect people to the water district board.

“The district is then independent and we’re able to have a separate revenue source that’s going to be very modest and very small, but we don’t have to go through this drama all the time, and we don’t have to go and scrape and bow in front of the commissioners for something as important as groundwater,” Gerfers told the board.

In the meantime, Gerfers told the board, “We need to get our funding this year, and in order to get the funding this year, we need a legal memo that Mike [Gershon] would draft for us that gives the commissioners legal cover to go against their county attorney and go ahead and fund us.”

The board voted unanimously to approve a legal memorandum to be drafted on behalf of the district by Gershon, which would explain to commissioners that there was legal precedent for them to legally fund the underground water conservation district, against the county attorney’s advice.

The memorandum would present commissioners with two much more recent legal precedents than the AG opinion presented by Ponton, Gerfers said, and cost the district $400 to $500 to draw up. If successful in persuading the commissioners, it would secure the PCUWCD’s funding from the county for at least the 2022 fiscal year.

On Wednesday, Gerfers said the county judge indicated the PCUWCD was likely going to receive its $47,000 in funding, like it did last fiscal year, averting any immediate funding crisis the board was concerned about. The board will still need to secure future funding, though, with a path to becoming a voter-approved taxing entity still on the table.