City of Houston Scores Major Victory in Water Rate Lawsuit
April 22, 2011 --The Austin Court of Appeals has upheld a lower court ruling that Former Harris County Tax Assessor-Collector Paul Bettencourt and activist Bruce Hotze have no standing to challenge Houston’s water rate structure.
Bettencourt and Hotze attempted to challenge the new water and sewer rates approved a year ago by Houston City Council. Due to their intervention, the City has been unable to obtain approval to move forward with a $300 million bond sale needed to finance capital improvements for the City’s Combined Utility System. The delay has put the City at risk for an estimated $37.72 million in higher interest costs over the life of the bonds.
“This legal fight has cost Houston taxpayers dearly,” said Mayor Annise Parker. “Mr. Bettencourt and Mr. Hotze have now lost in the courts twice. It is time for them to end this needless and very expensive game that has prevented the City from following through on improvements to its water and sewer system.”
“This is a significant legal victory and should mark the end of the road in the challenge made by Bettencourt and Hotze,” said City Attorney David Feldman. “We knew from the start there was no legal basis for their challenge. It is unfortunate that they chose to take this on because they hurt taxpayers.”
Houston City Council took a major step forward by securing the financial future of the water and sewer system with a new rate structure that accurately and fairly reflects the cost of providing these services. The old rate structure was not generating enough revenue to maintain the treatment and distribution systems. This valuable resource needed to sustain Houston had annual deficits of $100 million. With closure of the legal fight and council’s action, the system is on firm financial footing and moving toward pay-as-you-go funding for more of our future water and sewer improvements.