San Antonio Water System: Fraud Upon Fraud

Puente SAWS

Corruption and insider deals are a constant threat to good government and public administration.  Our founding fathers were keenly aware that officials charged with spending the public purse would often rely on the advice of friends and contributors to direct public dollars, and the temptation to fund projects that benefit either themselves or their friends would be irresistible to many.

The founders responded by placing strong limits on the scope and role of government.  Those limits have long since been eroded, to the point that, even in Texas, state and local governments are often the largest market for services and source of funds to pay for them.  Governments at all levels have adopted strategies with varying success to limit the impact of fraud, incompetence, and greed on public decision making.  Open meetings, public records freely available, public bidding requirements, etc. represent some of those measures.

It is truly remarkable that under the direction of Board Chairman Beto Guerra and SAWS CEO Robert Puente, SAWS has managed to overcome any and all such safeguards. SAWS has added fraud upon fraud upon the people of San Antonio and its City Council which is the body that should have oversight and ultimate control over their activities.

The recent City Council election revealed a strong undercurrent of voter discontent, turning out the incumbent mayor by a wide margin, and electing an unprecedented number of non-establishment backed candidates.

The management of SAWS, it’s projects, the rates it charges, and the salaries it pays were all major topics.  In terms of public concern, salaries always come to the fore, and Robert Puente was an easy target, as his salary and benefits are approximately double what any other large water utility in Texas, and there are many, pays its CEO.

As reported by Brendan Gibbons in the Rivard Report, “his salary has risen from $275,000 to $468,194.40, not including annual bonuses, the most recent of which was $99,285.71.  This amount stands out, as Puente’s starting salary was and is higher than the current salary of most major water and wastewater authorities in our state.

Robert Puente’s salary, lavish as it is, is frankly a side-show compared to the massive waste that has occurred under his direction and leadership.  It does serve however as a textbook example of the culture of corruption that governs SAWS decision making.

Rather than taking action itself and recommending corrective measures, the board doubled down on the controversy by one of the oldest diversionary tactics known to government: hire a consultant to deflect responsibility for key decisions.  In this case the Board hired two consultants that will cost SAWS customers $193,000 over three years.

This obvious ploy should shock the public and the Council to action, as it’s hard not to construe this as an effort to use the rate payers to pay for a prolonged study in the hopes the controversy will die down.  Concerned citizens can look forward to Board Chair Guerra lecturing them over the next three years in his usual patronizing manner: “we hear your concerns and we are taking them very seriously…”

It isn’t necessary to impugn either the competence or integrity of ScottMadden and Paradox Compensation Advisors, the two consultants retained by SAWS to recognize that the fox is in charge of the hen house.  They are being retained by the SAWS Board to question the Board’s decision making regarding Puente’s salary.  Is it likely that they will bite the hand that feeds them?  The average rate payer has every reason to question their objectivity, and at best the consultants will be wary of delivering any remarks that might be critical of their pay masters.

Given the controversy that regularly swirls around SAWS, at a minimum it should’ve been the City Council, with or without hiring consultants, that examined Puente’s salary.  After all, Puente didn’t dictate his salary requirements to the Board (assuming that wasn’t the case).  It was the Board that made the decision and it’s the Board’s effectiveness in managing SAWS that ought to be scrutinized.

The real scandal isn’t Puente’s lavish salary, it is merely a symptom of an agency out of control and in need of reform.  SAWS has many good employees who attempt to run the utility in a competent, professional manner and Steve Clouse has run this part of the business as well as could be expected.  The utility staff isn’t the problem, as the rot is for the most part confined to the Board, Robert Puente and his inner circle.

SAWS was created as an independent public utility to keep it out of the political fray.  It has however taken over responsibility for planning and conservation to the detriment of the City and the City Council.  A case can be made that SAWS is more important than the City Council as its ability to encumber the residents in debt and direct development by allocating who gets water, from where and when sharply limits the ability of the City Council to budget and shape economic development.

The following comment was posted to Brendan Gibbon’s article cited above:

“Is it possible to trust anything SAWS does? The truth is their every effort is designed to manipulate, hide the ball, and direct outcomes to predetermined agendas. Why on earth would we trust the SAWS Board with the task of hiring the consultants? This is yet another attempt on their part to distract the public from the urgent need to replace the entire SAWS Board and remove Robert Puente who has politicized the agency to an unprecedented degree and far overstayed his welcome.

“SAWS fought legislation last session that would’ve subjected SAWS to sunset review at far less cost to the ratepayers and more important, provide a true, independent review of their operations. The next session needs legislation to Sunset the Board and replace it with either an elected board or place it directly under the city council.”

This comment has more truth in it than most of what comes out of the SAWS Board.  The City Council needs to take matters into its own hands, and if the friends of SAWS have too much sway at the council level, then the Legislature must act.  A good starting point would be for the City Council to take a hard, independent look, at the Vista Ridge project.  A focused study would engage the public and could be completed in a matter of months rather than years.

A consultant with no financial ties to SAWS, the Council or Vista Ridge should examine at how the project was approved and why the SAWS Board made concession after concession to the project beneficiaries long after it was apparent that less costly projects, developed in conjunction with regional partners were already in the State Water Plan.  This study would go a long way towards restoring public confidence in local government and point the way to corrective measures in advance of the 86th Legislative Session.  The ball is in the City Council’s court and it up to them to end the excuses, stop the cover ups and take control of San Antonio’s water planning.

Don Pacifico is an attorney with over thirty years of experience in the politics of Texas Water.

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