Vote on sale of water looms

01 03, 2012 by The Advocate

Toledo Bend plan draws criticism

The Jindal administration opposes, at least for the time being, a proposal by Republican fundraisers that would sell Louisiana drinking water to Texas.

“There’s talk of a January vote and I think that is way too fast,” Stephen Waguespack said last week. He is reviewing the deal for Republican Gov. Bobby Jindal. The contract will need Jindal’s signature.

The 13-member Sabine River Authority Board, called SRA, is expected to vote later this month on a contract of up to 99 years duration, which would sell to private investors up to 600,000 acre-feet of fresh water — about 195 billion gallons — from Toledo Bend for 28 cents per thousand gallons. The state is allowed to sell up to 1 million acre-feet of the 76-mile-long reservoir, which is capable of storing about 4.5 million acre-feet of water.

If the terms are met and agreed upon, the SRA could net about $54.7 million a year. The SRA reports that in good years, its annual budget is about $4.5 million.

“I don’t think they have worked through all the complex issues with those stakeholders. They need to do that,” Waguespack, Jindal’s chief of staff, said of the SRA. “Stakeholders” include farming communities that depend on the water for irrigation, natural gas drillers in the Haynesville shale fields who use water-intensive processes to extract natural gas, and downstream efforts that use the fresh water from the Sabine River to help rebuild marshes to stop coastal erosion.

But Donald T. “Boysie” Bollinger, the head of Toledo Bend Partners LP, the private company proposing to buy the water, said the contract would provide the SRA, the people living in the parishes next to the reservoir, and the rest of the state, money from a resource presently not being used.

“We’re throwing this water down the Sabine River into the Gulf. It’s excess water for the needs of Sabine River basin parishes,” Bollinger said. If the contract is approved, TB Partners would build a pipeline and sell drinking water to Texas municipalities, he said.

The 2007 State Water Plan for Texas projects future municipal demands will increase 92 percent between 2010 and 2060, from 1.5 million acre-feet to 2.9 million acre-feet.

The minutes of meetings of the Dallas City Council show that Texas’ second largest city has been pursuing drinking water from Toledo Bend since 2008. Houston, that state’s largest city, unsuccessfully sought the water before that.

Bollinger’s family, as well as family members of Aubrey Temple Jr., a banker and businessman from DeRidder, and Billy Joe “Red” McCombs, a San Antonio car dealer and investor, are listed in the proposed contract as owning 10 percent or more of TB Partners, a company with dozens of investors.

Bollinger, a Lockport shipbuilder, his family and their companies have given nearly $1 million in 500 contributions to candidates seeking a variety of offices in Louisiana over the past dozen years, according to disclosures made with the Louisiana Board of Ethics. Temple has given about $53,000 to GOP candidates in Louisiana.

Negotiations between TB Partners and the Sabine River Authority began in January 2011, said Jim Pratt, SRA executive director. A contract was hammered out in June 2011. But Jindal kicked it back, saying because the water is owned by Louisiana taxpayers, the SRA needed to follow established competitive bidding procedures, a process called “Request for Proposals.”

An advertisement ran in the Sabine Index newspaper on Oct. 19 and Oct. 26. The SRA sent out packets to five or six parties that expressed interest, but only TB Partners submitted a proposal, Pratt said.

The difference between TB Partners’ proposal in June and the one presently before the board is that the price paid the SRA for its water increased to 28 cents and terms were adjusted for how a $40 million “reservation fee” would be paid during the seven to 10 years while the pipeline is built. No water would be taken until the pipeline is finished.

The SRA is scheduled to close public comment period Friday and plans a Jan. 12 public hearing, Pratt said. A committee of the SRA Board recommended approving the contract at the next official meeting on Jan. 26.

Louisiana and Texas, which geographically share Toledo Bend, are each allocated 1 million acre-feet of water. Louisiana has historically used less than 3 percent of its annual water allocation, according to an SRA analysis of the proposed water sales agreement. But about 1 million acre-feet of water flows through a hydropower plant that makes electricity, mostly between May and September. Hydropower plant fees account for about 40 percent of the SRA’s budget.

Pratt said selling the water to TB Partners would spread the water use throughout the year, rather than being concentrated in the summer, when recreational use of the lake is at its height. The plant still could make electricity, but only when there is enough water in the reservoir, he said.

At a Dec. 7 meeting held in Baton Rouge, state Soil and water Conservation Commission member Ernest Girouard asked if a severe drought occurred and there is no water to sell, would Louisiana taxpayers be liable? “They could not give him an answer,” stated minutes of the meeting.

Sabine Parish opponents to the contract usually begin by saying they don’t oppose selling water from Toledo Bend. But they then question whether the amount of water being sold can be better controlled by the SRA, as Ted Dove of the Toledo Bend Citizens Advisory Committee, a group made up of homeowners, did during an interview last week.

“We, as a community, have to be assured that all the what-ifs have been studied and analyzed and addressed in the contract,” Dove said. Among several issues the community wants addressed, he said, “We want to be assured that water levels stay at a viable level.”

Chester “C.A.” Burgess Jr., a SRA board member from Evans, said the local opposition is not that widespread. “Why it’s so emotional right now, is because the lake is low because of the prolonged drought,” he said, noting that some boat docks are dry.

Linda Curtis-Sparks, director of the Sabine Parish Tourist Commission in Many, said the tourism industry also “wants assurances about the level of the lake.”

About 200,000 day users visit Toledo Bend’s recreational facilities each year to swim, fish, boat and picnic. About 60,000 stay overnight, according to the SRA analysis. The estimated the annual economic value of recreational boat fishing alone is $38 million, the SRA says.

The height of the reservoir is usually about 172 feet m.s.l. Mean sea level, or m.s.l, is the standard measurement of the elevation in bodies of water.

The hydro-electric generating plant is legally required to shut down when the lake goes below 168. The lake is not navigable at about 163 feet m.s.l. Drought has caused Toledo Bend elevations to hover around 160 through much of 2011.

The “Drought Contingency Plan,” which is an attachment to the contract, outlines how much water would be taken should the reservoir’s water elevation fall below specific levels. For instance, if water levels drop to 160.42 feet m.s.l, the SRA could vote to reduce the amount of water available for sale by up to 20 percent.

Many Mayor Ken Freeman, whose sales tax revenues have decreased because of the drought-caused decline in tourism, said if the board invoked the full 20 percent reduction on today’s level, Toledo Bend levels would drop another 3 feet or so from the water that is taken under the proposed contract’s drought protocol.

But Freeman said there is an even bigger issue at stake: the growth of the world’s population and the growing need for fresh water. The contract would lock in a price —for up to 99 years — for a commodity whose value could explode, he said.

“How much money are we leaving on the table by not going out to advertise this to the people who understand high finance and commodities and the next big thing?” Freeman asked.