Dear Editor:

By now, members of North San Saba Water Supply Corporation (NSSWSC) should have received a letter notifying them that the Corporation is accepting nominations for three director positions for election to the board. The election will be held on February 9, at the Annual Membership Meeting.The members also recently received a letter from NSSWSC dated September 30, 2011, containing the good news that the Corporation had been able to pay off a $25,000 loan at a local bank and pay an extra $50,000 on the long standing FmHA loan. The letter also reminds members that January, 2012, will be the month when payments to members will end. This refers to the rate rollback and the refunds to members as directed by the Texas Commission on Environmental Quality (TCEQ) as a result of the successful rate appeal filed by members in 2008. In February, 2012, the base rate will become about $70.00 and this does not include any water.As you may recall, a sufficient number of signatures were collected from members on a petition and a rate appeal filed with TCEQ on September 3, 2008.In 2009, NSSWSC made the decision to hire an attorney and contest the rate appeal. This came as a surprise since NSSWSC had not produced any calculations to justify the new rates. As mentioned, Rule§ 291.12 of the TAC places the burden of proof on the utility to show that the proposed rate can be justified. The attorney for NSSWSC tried to make the case that if required to roll the rates back and make the refunds, the Corporation would not survive.In fact, a current board member provided prefiled testimony as follows: "I do not believe the company will survive if the rates are rolled back to those rates effective prior to August 25, 2008, much less if the company is required to refund the amounts paid by the membership in excess of those rates." Not only did NSSWSC not fail, it made considerable improvement financially. This financial improvement would not have happened were it not for the rate appeal.In numbers, the checking account reached approximately $140,000 just before the $25,000 loan was paid off; the extra $50,000 was paid on the FmHA and over $23,000 was paid for a new system monitor. This was done with the rates rolled back and refunds being paid to the members.Unfortunately, NSSWSC seems to have a problem with some of the records at times. This became clear in the administrative action that resulted from the rate appeal. After the legal proceedings were completed, the Administrative Law Judge (ALJ) Rebecca Smith issued her PROPOSAL FOR DECISION. This document can be found on the web by doing a search for SOAH DOCKET NO. 582-09-0660. In the DISCUSSION section of this Proposal, the ALJ noted that NSSWSC had numerous problems with their records as indicated in their prefiled testimony. Specifically, the ALJ noted on page 6, that the TCEQ auditor assigned to this proceeding testified that she "did not use invoices, check copies, or income statements because they were incomplete and contained discrepancies." Also on page 6, the engineer assigned to this proceeding testified that "some of the water consumption information North San Saba provided was incomplete, inconsistent, and apparently inaccurate."On page 3 of her DISCUSSION, the ALJ pointed out that "the Board calculated the rate by simply increasing North San Saba's rates the same percentage as the City of San Saba had increased the rate amount." Furthermore, the ALJ noted that "North San Saba did not perform any additional calculations or studies to determine the new amount." This is to say that NSSWSC did not make any calculations to justify the rate increase.The lack of justification for the rate increase was crucial for the ALJ's Proposal that the rates be rolled back and refunds made. Rule § 291.12 of the TEXAS ADMINISTRATIVE CODE (TAC) is very clear that the burden of proof shall be on the utility to show that the proposed rate can be justified. The ALJ made reference to the provisions of Rule § 291.12 seven times in her PROPOSAL. It should be noted that NSSWSC did not produce any records before or after the rate increase to justify the new rates.It is almost impossible to successfully contest a rate appeal without a rate analysis to justify the increase. This misguided effort coast NSSWSC almost $25,000 in attorney fees.In addition to record-keeping problems, it was interesting to see that the ALJ recognized that the testimony of two past Board members was identical.A more recent problem with records concerns what appears to be a work log though it is not labeled. According to this record, the operator's average monthly mileage is 5,250. The record for the September-October period shows the operator worked twenty days. This results in a daily average of 262.5 miles traveled. If the average speed traveled on the system is forty miles per hour, it will take an average of 6.6 hours of travel each day. Again, these mileage numbers are averages which mean that ten of those twenty days require more than the 262.5 mile average. The number of miles traveled could be 280,300,320 or whatever. For a system with only about 70 miles of line, the 5,250 mile average seems unreasonable to say the least.Hopefully, there will be nominees coming forth that if elected to the Board, will be able to bring about some needed guidance.Charles TerryAustin, Texas Dear Editor: