Sunset Commission Recommends SJRA Improvements, But Tiptoes Around Key Issues

On January 21, 2021, the Texas Sunset Commission released its “Staff Report with Commission Decisions” on the San Jacinto River Authority (SJRA). The 53-page report generally gave the SJRA a good review, but recommended that it:

• Improve trust through better communications, public outreach, openness and transparency
• Receive better value by improving contracting processes

The Commission also recommends that the Texas Legislative Council update and consolidate the SJRA’s governing law and processes.

The Sunset Act never subjected the SJRA to abolishment. However, it put its governance, management, operating structure, and compliance with legislative requirements under a microscope.

Litigation Issues Deliberately Not Addressed

The report alluded to issues surrounding flooding and groundwater. However, Sunset Commission does not comment on issues in litigation as a matter of policy, so as not to influence the outcome. And although the Commission received extensive public input, it did not address comments directly for the same reason.

Those who take the time to read the entire report will be rewarded with a thorough, yet concise and illuminating summary of the SJRA’s business and the challenges it faces. The SJRA has adopted most, if not all, of the recommendations made by the Commission to some degree. Adopting the recommendations should not have any adverse fiscal impact on the SJRA or cause it financial strain.

Need for Better Communication and Engagement to Improve Trust

The Commission found that SJRA needs an effective communications strategy to advance projects. Especially if the projects could result in increased costs to the general public years before the public sees benefits.

Criticism: SJRA has not developed a formal strategy for engaging the general public in its activities, struggles to provide clear explanations of its wholesale water rates, and does not maintain important information on its website.

The Commission recommended a more proactive and strategic approach to communicating with and engaging the public. That, it felt, would help SJRA earn the trust of and get buy-in from the communities it ultimately serves.

Key recommendations included:

• Require SJRA to adopt a public engagement policy that guides and encourages public involvement on key decisions.
• Direct SJRA to develop a strategic communications plan.
• Direct SJRA to provide clear, understandable information on its rates and fees prominently on its website.

Improve Contracting Function to Receive Best Value

The Commission also found that the SJRA guidance to staff fell short in important areas. Those areas included justifying the need to outsource services and maximizing open competition for contracts. In addition, the commission also felt SJRA lacks consistent documentation for monitoring the performance of its vendors.

Key recommendations included directing the SJRA to:

• Establish additional guidance for contracting needs and procurement methods, and use open solicitations except in documented exceptions.
• Consistently monitor, document, and evaluate vendor performance.
• Improve the transparency, fairness, and effectiveness of its contracting process.

Update Governing Law and Processes

Over the years, Sunset reviews have included a number of standard elements designed to ensure open, responsive, and effective government. SJRA’s governing law does not contain several standard provisions, including those related to the governor’s appointment of the board president, grounds for removal of a board member, board member training, separation of duties of board members from those of staff, public testimony at board meetings, and maintaining a system for receiving and acting on complaints.

SJRA’s governing law is also uncodified and difficult for the public to find and understand. Finally, SJRA lacks goals and a plan to increase its workforce diversity.

Key recommendations:

• Apply the standard across-the-board requirements regarding governor appointment of the board’s presiding officer, grounds for removal of a board member, board member training, separation of duties of board members from those of staff, public testimony at board meetings, and maintaining a system for receiving and acting on complaints.
• Direct the Texas Legislative Council to update SJRA’s governing law.
• Direct SJRA to plan and monitor its efforts to increase workforce diversity.

Other Findings

Strained Relationships with Stakeholders

Sunset Commission staff observed how protracted legal disputes and other controversies have strained SJRA’s relationship with some stakeholders and communities. That eroded trust in its decision making and jeopardized its ability to conduct the long-term planning and construction for which the Legislature created it.

The general public was highly critical of SJRA’s efforts, in contrast to SJRA’s direct customers who were generally satisfied with the authority’s performance.

No Formal Strategy for Public Engagement

SJRA’s own recent public opinion poll revealed most respondents had a negative opinion of the authority, no opinion of it, or had not heard of it, highlighting the need for direct outreach to the public rather than relying on others to speak on its behalf.

Lack of Clear Communication about Rates and Fees

A frequent complaint during the Sunset review was that consumers often see an “SJRA fee” or “surface water conversion fee” listed on their monthly bill with little to no explanation. SJRA’s public opinion poll confirms many consumers do not know what the fee is for. Only about half of respondents correctly identified the fee is used for maintaining a water treatment plant and pipeline.

Several other wholesale water providers in the region explain their rates and fees, which are higher than SJRA’s, on the front page of their website and clearly describe how some retail utility providers modify the fees when passing them on to consumers to cover other costs.

Governing Law Outdated, Difficult for Public to Find and Understand

While some water districts and river authorities are governed by laws that are fully compiled in a specific Texas code or statute, SJRA’s governing law exists solely in “session law.” That means changes are scattered in various statutes and amendments dating back to 1937. In the absence of ONE codified statute, members of the public and even the river authority itself struggle to correctly compile all of the changes to its laws and understand their cumulative impact.

For example, SJRA’s governing law stipulates the board has six members, even though the Texas Constitution now requires all boards and commissions to have an odd number of members. Even Rep. Will Metcalf’s recently introduced bill, HB3116 – recommending changes in how the governor makes SJRA board appointments – still refers to six positions.

Although general law adds a seventh member to preserve the board’s constitutionality, this outdated provision in SJRA’s governing law misrepresents the board’s actual makeup.

SJRA’s governing law contains many more out-of-date references to defunct state agencies and code sections that have been amended, renamed, or no longer exist, further complicating full understanding of the authority’s powers and duties.

Revenues and Expenses

The SJRA had approximately $112 million in revenues in Fiscal Year 2019 with $115 in expenses. The difference had to do with some reserve-fund expenditures for specific projects.

Litigation Summary

For an excellent summary of SJRA litigation over groundwater issues and Harvey flooding, see Appendix B on Page 37. Even as someone who follows these cases closely, there were several aspects that I simply did not know about.

For More Information

Read the entire Sunset Commission report and visit their website. One thing I discovered: the SJRA was apparently the only agency/authority reviewed last year for which the Sunset Commission did not request legislative changes.

For the Sunset Commission Report to the Legislature on all agencies, click here.

For the State Auditors Report on recommendations that were self-implemented, click here.

Posted by Bob Rehak on 3/21/2021

1300 Days since Hurricane Harvey