ECUD alleges wrongdoing by City of Odessa

President of the Ector County Utilities District Tommy Ervin, right, speaks to the Odessa City Council on the issue of issuing debt for the water treatment plant during a council meeting Tuesday, July 27, 2021, at Odessa City Hall. (Odessa American File Photo)
Tommy Ervin

The battle between the Ector County Utility District and the City of Odessa heated up this week, leaving the folks in West Odessa in the middle.

On Tuesday night, the Odessa city council, without discussion, voted to start billing ECUD on a month-to-month basis, and ECUD has filed documents with the Texas Public Utilities Commission alleging wrong-doing by the city.

The City of Odessa has had a contract with ECUD to provide the district with water since October 1976 and it’s been amended several times, most recently in November 2020.

While the contract remains in effect until 2049, the city is required to review the wholesale rate annually and revise it based on “the city’s audited financial statement from the previous year adjusted for known and measurable changes.”

Although there were no discussions prior to Tuesday night’s vote, materials supplied to the council in advance of the meeting indicate City Attorney Dan Jones wanted to begin charging ECUD month-to-month because he believes the water rate contract signed in 2020 is “invalid.”

Jones did not indicate why he thought so, but according to emails obtained by the Odessa American through the Texas Public Information Act, he contends ECUD President Tommy Ervin cannot hold his seat because of drug felony convictions dating back to the late 1970s.

Since he can’t hold that seat, his signature on the ECUD contract is invalid, Jones contends.

Ervin insists he was pardoned.

The Texas Rangers declined to launch an investigation after Odessa Headlines Publisher and Odessa Development Corporation Vice President Jeff Russell filed a complaint against him. The Rangers stated “the merits of the allegation did not rise to a level of Texas Ranger investigative involvement.”

In an interview Friday, Ervin believes the city of Odessa is trying to harm his reputation because he has been consistently researching alternative water sources for West Odessans. If the alternative water sources decide not to deal with him, Ervin said the city believes they will continue to receive roughly $225,000 a month for water from ECUD and potentially benefit once Nacero’s carbon capture plant becomes a reality in Penwell.

By the time Nacero is completely built out in 2033, it will require 8.7 million gallons of water a day, Ervin said.

City officials were not immediately available for comment Friday.

ECUD and the city have been battling over the last few years over how the city determines how much to charge ECUD, Ervin said.

In fact, an email obtained by the Odessa American, indicates the city agreed to reimburse ECUD more than $1.9 million in March 2021 after ECUD disputed the way the city was billing them.

Ervin said that money was then used to pay the city for several months worth of water.

The same issue arose again this year, but because certain city officials refuse to believe he was pardoned, Ervin said he has not been able to get them to the table like he and ECUD’s lawyers did in 2021.

According to a letter sent to Utilities Director Kevin Niles on Aug. 16, ECUD alleges the city overcharged the district $169,360 in FY21, $37,230 in FY22 and $111,000 as of August of this year.

On Aug. 21, Mayor Javier Joven responded with an email to City Manager John Beckmeyer, Deputy City Manager Agapito Bernal, Jones and Niles with the following: “ECUD negotiated those rates were (sic) not adjusting a thing. Also we as a city cannot negotiated (sic) or respond to Mr. Ervin until ECUD resolves the board president issue. It’s been a year.”

In September Jones and ECUD attorney Randall Wilburn exchanged a few letters with Jones saying Ervin should be able to produce a pardon or clemency and since he has not, “one must accept the fact that he remains a convicted felon in the State of Texas.”

“It is imperative that ECUD not withhold payment, otherwise, ECUD will place its customers in jeopardy of losing their water,” Jones wrote.

Wilburn noted the allegations about Ervin had been “put to rest” by the Texas Rangers and the Texas Attorney General. He further wrote that the city has failed to provide the data and calculations supporting the rates charged.

Despite the city’s utility department’s inability to “show its work” regarding its rate calculations, the district obtained the data required to calculate the rates charged, Wilburn wrote.

“The city’s own data shows the city miscalculated the rates charged the district,” Wilburn wrote.

He also said ECUD was willing to sit down with the city to go over the calculations since “the city has lost several key employees and likely does not have any current staff with knowledge of how to calculate the rate.”

Jones indicated the water rate calculations are provided by an independent third-party and the city would continue to charge the same way.

Ervin said Friday there are laws that prohibit the city from shutting off ECUD customers’ water so West Odessans need not fear that possibility.

As for resolving the dispute, Ervin said ECUD is filing a petition with the Public Utility Commission of Texas to appeal the water rates imposed by the city.

“I’ve been wanting to go to the PUC for a couple of years or more, but it’s finally gotten to the point where the board said, ‘Tommy, you’re going to get your way. You can go to the PUC,’” Ervin said.

According to the petition, the city is supposed to base the rates on the city’s audited financial statement from the previous year adjusted for known and measurable changes, but it does not.

Instead, the petition states, “the city uses inflated budget numbers not adjusted to actual costs for calculating the rates in violation of the agreement.”

The petition states the water rates of the city are neither “just nor reasonable” and are, in fact, discriminatory because they are “not based upon the actual cost of providing service” to ECUD.

“The petitioner is willing and able to pay a just and reasonable rate for that water,” the petition stated.

Wilburn, ECUD’s attorney, is also asking the commission to set interim rates until the situation is resolved.

Failure to do so, he wrote, “could result in an unreasonable economic hardship” on ECUD.

Ervin said he’s 100% positive ECUD will emerge victorious or else he wouldn’t have pushed for the petition.

“They’re going to have to prove their worksheet to the PUC,” Ervin said.

Hopefully it will be resolved once and for all, he said.

”We can’t go through this crap every time there’s a regime change,” Ervin said.

Ervin also confirmed City Councilwoman Denise Swanner last year applied for ECUD’s director position but ECUD hired former Ector County Judge Debi Hayes.

He has spent $4,000 on an attorney to try to find the documents he needs to prove he was pardoned, but the records are missing, he said.

The State of Texas simply had poor record keeping policies back then, he said.

“There’s not even a log-in book to show you applied to the Parole and Pardons Board,” Ervin said.

His past wasn’t an issue until a year and a half ago and in all of the years since his arrest he’s worked hard for his community, Ervin said.

Even if he were to leave ECUD, Ervin said he would continue to look for alternative sources of water for West Odessa.

No one at city hall knows him or what his goals are for West Odessa, Ervin said.

“My goal is to make sure West Odessans get a quantity and a quality of water for years and years to come,” Ervin said.

As for the Nacero plant?

“Why can’t the city partner up with ECUD instead of trying to wipe us off the face of the earth?” Ervin asked.