Judge did not issue order for new LHWSC election


Judge did not issue order for new LHWSC election

District Judge Billy Ray Stubblefield did not issue an order directing the Liberty Hill Water Supply Corp. to hold another election of its membership as claimed in a resignation letter issued last week by Board President Tracy Wiggers.

Through an Open Records request, The Independent obtained a copy of Wiggers’ letter of resignation signed Sept. 18, which lists the following as “reasons” for his decision to resign:

“Judge Stubblefield has ordered the LHWC to hold another election suggesting that we hire an outside consultant to run the election. This expense was ordered to be paid by the LHWC at a cost that could be up to 50 thousand{sic},” he wrote.

Attorneys from both the LHWSC and the City confirmed Monday that they had received no orders from the Court regarding a future election, except that the LHWSC is prohibited by a restraining order from having a membership meeting and taking any action that could impact the existing Transfer Agreement.

“So far the Court has ordered that the WSC cannot hold an annual meeting,” said LHWSC Attorney Richard Hamala.

It is at the annual membership meeting that an election is typically held in accordance with the Bylaws to seat a Board of Directors. That meeting was scheduled for August 9, but was not held because the Court issued a restraining order prohibiting the LHWSC from taking any action pertaining to the impending transfer of the water system to the City. The City sought the intervention of the Court after it obtained evidence that indicated the results of early voting this summer could have been compromised. In addition to electing members of the Board of Directors, LHWSC members were asked to vote on the transfer of the corporation’s assets to the City.

City Attorney Art Rodriguez confirmed Monday that Judge Stubblefield has issued no orders in the case, except to extend the City’s request for a restraining order against the LHWSC.

“In effect, they have been ordered not to hold an election,” Rodriguez said. “Basically, this entire paragraph (referencing Wiggers’ letter) is completely not true.”

Rodriguez said as part of the original settlement proposal, the City offered to conduct an election of the LHWSC membership after questions arose about the integrity of the voting process. He said the offer expired because there was no agreement between the two parties. He said he did not know where Wiggers got the idea that an election of this type would cost $50,000 because the City estimated it could cost from $5,000 to $10,000 at the most.

“$50,000 is way out of proportion,” said Rodriguez.

At the time of the City’s first offer, Hamala told The Independent that he did not believe he had the authority to act on the proposal because the Board had not met to give him any direction.

The Board is scheduled to meet at 6:30 p.m. Tuesday, Sept. 27. It will be the first meeting since the City filed a lawsuit against the LHWSC in August. On the agenda is discussion and possible action on a settlement offer proposed by the City. After meeting in executive session Monday, the City Council voted unanimously to propose the offer to the LHWSC today.

Rodriguez said he could not disclose any information about the offer until after the LHWSC Board acts on it.

However, he said if the offer is rejected Tuesday, the City will proceed with a scheduled hearing Oct. 5 in which the proposal will be submitted as a plan for condemnation of the LHWSC.

“The Transfer Agreement is not working,” said City Manager Manuel De La Rosa. “So the only way to move it forward is through condemnation.”

De La Rosa said the City’s amended petition, which was presented to the Court August 23 included a provision for condemnation.

“I was told by the Liberty Hill City Manager that no matter the outcome of that voting, the City of Liberty Hill will proceed with the condemnation of the LH Water Corp.,” Wiggers wrote in his resignation letter. “It may take months or even a year, but in my mind I see thousands of dollars of your money going to lawyers. We should be here to dig wells, provide water, repair streets, build sidewalks…not fight amongst ourselves wasting the citizens and co-op members money for the power of the water.”

Since discussions began more than two years ago on the transfer of the corporation to the City, the Board of Directors has been divided on the issue with the primary opposition coming from Wiggers and Secretary-Treasurer Wendell McLeod. The former general manager of the LHWSC, McLeod now serves as water utility operator for the City.

From the beginning, the primary objection expressed publicly by Wiggers and McLeod to a merger was the future employment of McLeod and his wife, Maryanne, who is also working for the City now. The couple accepted three-year employment contracts with the City.

LHWSC Directors Charles Canady, Glenda Gavin and Jerry Casebolt have been supportive of the merger with the City.

“This has been an ongoing process for more than two years, and its’ clear that the Transfer Agreement didn’t work even though the City has honored its side of the agreement,” De La Rosa said.

The City, which was retained this summer to manage the daily operations of the water system in anticipation of the eventual merger, has repeatedly requested to see LHWSC records such as the checkbook.

De La Rosa added that in the absence of Wiggers from the Board, the issue becomes an even greater concern because two signatures are required on LHWSC checks.

De La Rosa said until he receives it, he can’t be sure whether the LHWSC is paying its bills or how funds have been spent since the City became the system’s operator. The City is not responsible for paying the bills of the water system.

“It (the checkbook) is important, but there are so many hurt feelings that I figure we will eventually get it through the condemnation or a settlement,” he said. “At this point, there’s no reason to be believe there is any problem there other than poor management.”