Brownsville City Commission OKs pause on late fees, disconnections

PUB Forensic Examination: Third in a Series

During today’s special meeting, the Brownsville City Commission unanimously approved the final reading on Ordinance 2022-1534-A, which establishes a pause on Brownsville Public Utilities Board late fees and disconnections until Feb. 28, 2023.

The approval comes in light of the Carr, Riggs & Ingram LLC Forensic Examination Report, which investigated the Brownsville Public Utilities Board’s activities leading up to and after an agreement with Tenaska Inc., an international power development company, to build a local natural gas-fired generating station, according to the CRI report. 

“There are funds that were raised for a project that has been terminated that should be given back to the community,” Patricio Sampayo, BPUB vice chair, told the city commission.

Before the commission voted to approve the item unanimously, Brownsville District 4 City Commissioner Pedro Cardenas said it is important to continue to call ratepayers who owe money, even though fees and disconnections will be paused.

“Come March 1 … it’s going to be a big bill to pay,” Cardenas said. “Let’s try to continue to find a way to at least call and offer payment plans. … Because if we wait till the end of this … that’s going to be a huge bill.”

Mayor Trey Mendez agreed.

The commissioners also heard an update from BPUB officials on proposed uses of the funds collected to support the failed Tenaska Project.

Sampayo said the next two questions BPUB and the commission has to focus on is how much is owed to the ratepayers and how to go about paying them back.

One option would be to set aside a percentage of the funds to assist low-income households first, Sampayo said. The proposal is inspired by the San Antonio City Council’s approval last December of a $50 million electric rate rebate, or partial refund, which sets aside 15% for low-income families.

“The Tenaska Equity Fund has been pretty well publicized and the amount has been out in the public for some time now,” he said. “And that is the $29 million that has been sitting separately within PUB accounts.

“And then … last week at a city commission meeting, it was mentioned there are some funds that were transferred to the city.”

Sampayo said estimates put that additional amount at about $11 million. He suggested it be included in the money owed to ratepayers, bringing the total to around $40 million.

The BPUB Finance Committee has scheduled a public meeting for noon Friday to get feedback from city commissioners, city staff and the public on what action to take regarding the $40 million. 

During last night’s BPUB meeting, the board approved a joint committee with the city commission to improve collaboration and prioritize paying back utility customers, according to Sampayo.

On the topic of the committee, Brownsville District 3 City Commissioner Roy De los Santos asked whether the board has contacted its legal counsel regarding potential conflicts of interest, including BPUB Chair Sandra Saenz, who previously worked as a secretary for former Mayor Tony Martinez, who was named in the CRI report. 

“Is that something that you all have looked at?” De los Santos asked. “Does it make sense for the chair to be unilaterally appointing this committee or should the board be making that decision? Or is the board vote required to ratify that?”

Sampayo replied that he would be “more than happy” to address it with BPUB’s counsel after the meeting and asked that any concerns regarding conflicts of interest be reported to the city attorney to share with the board counsel.

Mendez said he thinks setting aside some of the funds to assist low-income and at-risk households is a good idea. He also requested that BPUB gather data from payments over the last 10 years to figure out a formula that can be used to repay utility customers.

Mike Perez, BPUB assistant general manager and chief financial officer, said the extraction of data from the BPUB billing system should be completed “within a couple of days” but any delays will be reported to the board and commission.