Controversy is brewing in North Texas. At its center is an obscure local government behaving badly and raking in millions at your expense.
The entity in question is the North Texas Municipal Water District (NTMWD), an “invisible government” providing water and wastewater services “to more than a million people” in thirteen Metroplex cities.
One big problem with the NTMWD is that it charges people for water they aren’t using. Thanks to a “Take-or-Pay” contract provision affecting all members, “a city is continually obligated to pay for the maximum amount of water it’s ever used in a year.” Over-collecting has cost residents in Garland, Mesquite, Plano, and Richardson as much as $275 million.
Righting this wrong is straightforward either. Changing the contract’s terms requires unanimous consent of all member cities. Since some cities benefit at the expense of others, there’s little prospect of getting everyone to agree.
Other contractual issues exist too. The districtwide agreement sets unattainable water conservation goals and passes along, through its member cities, ever-increasing costs to residents. Curiously, the rates charged to member cities is high compared to nearby non-member cities, which pay less and are not responsible for its debt.
Additionally, the NTMWD’s governance structure may be a problem. Each member city appoints individuals to the governing board; but those individuals represent the water district and owe no allegiance to their respective cities. That’s left some asking: Who’s looking out for consumers?
Spending is yet another problem for the NTMWD. In 2015, the water district’s budget totaled $352.1 million. By 2020, its All Systems budget rose to $552.5 million, a 57 percent increase. Such aggressive spending growth has fueled more bureaucracy. In fact, the NTMWD has grown to more than 800 employees, nearly doubling in size from 2010.
Its appetite for public money is evident in other ways too. Not long ago, the city of Mesquite thought it had borrowed money through the NTMWD for a water infrastructure project; but instead learned that the entity had paid for it outright and, through fiscal year 2017, was keeping the debt service payments. New estimates put the cost of this “theoretical” bond at nearly $12 million.
North Texas MWD needs scrutiny. But it’s not the only one. Across the state, numerous special districts have been caught acting against the public interest. Reining in this bad behavior is one of the great challenges of our time.
It’s such a challenge, in part, because the universe of special districts is huge. A few years ago, it was estimated that there were approximately 3,350 special districts, including school districts, in Texas and several dozen different types. And, of course, each type has its own powers, methods of raising revenue, governance structure, and more. And differences exist even among like kinds.
The number and nature of special districts make it difficult to get our collective arms around the particulars. But it can be done. It simply requires the right policy prescriptions and enough political will.
The main avenue to achieve reform—though certainly not the only one—is the Texas Legislature. That puts state lawmakers in the driver’s seat. They need to shine a light on these invisible governments by doing things like requiring all special districts to create a website and post important financial information online, like budgets and check registers. They should also conduct a comprehensive review of all special districts to determine which entities are suffering from mission creep, spending too much, or are no longer needed. Lawmakers would do well to make large special districts undergo a third-party independent audit to see where they can do better.
Transparency and accountability reforms are the key to helping beleaguered taxpayers and ratepayers. Too many Texans, like those stuck in the NTMWD, are dealing with impossible situations. It’s time for a change.