In Niemanwatch Episode 1 we reported how the City’s land swap with FSW Investments LP for 2,313 acres in Northeast El Paso proceeded even though Karla Nieman assured City Council that would never happen if Great Wolf Lodge withdrew from its deal.
In this episode we examine how the City created a $30 million slush fund by imposing taxes through our water bills.
ILLEGAL TAXES?
Former Texas State Representative Joe Pickett observed that the “FRANCHISE FEE” on his water bill increased dramatically, and for three years he tried in vain to obtain an explanation from the City as to how this tax is spent.
He also questions two other taxes that appear on our water bills: a $5.00 “Environmental Fee” that the City refuses to explain, and a recently created “City Franchise Fee” on the water side of our bills that started at $0.77, rose to $1.24, and is now $1.33.
The City is allowed to charge water customers for wear and tear on streets caused by trash vehicles but Picket alleges that the funds have been spent for other purposes.
I reviewed my own water bills and saw that when Tommy Gonzalez became City Manager in June 2014, there was no “FRANCHISE FEE” or “City Franchise Fee.” These first appeared in August 2014 and June 2015, respectively.
PICKETT FILES SUIT, CITY HIRES OUTSIDE COUNSEL
Pickett filed suit against the City of El Paso in October 2020 but City Attorney Nieman did not inform City Council for three months—not until January 2021. I have attached his pleadings to this email for your convenience.
This past December 28, the 8th Court of Appeals dismissed the City’s claim of sovereign immunity and affirmed Pickett’s standing to sue. The City has until April 27 to petition the Texas Supreme Court if it wants to try to reverse this decision.
I just learned that the City hired Joseph L. Hood, Jr. and the firm of Windle Hood Norton Brittain & Jay LLP to represent them. Nieman seems to outsource any litigation that is more complex than traffic violations…
The City now has three options:
1. Appeal its defeat on the plea to the jurisdiction by petitioning the Texas Supreme Court for review.
2. Accept Pickett’s standing and return to the 384th Judicial District Court of El Paso County for a ruling on the merits.
3. Agree on a settlement with Pickett.
If the City chooses to continue litigating, City staff could be deposed under oath by Pickett’s attorneys, and it’s anyone’s guess what that might reveal to the public!
If Pickett prevails and forces the City to reimburse water customers, the judgment could amount to more than $60 million.
There is no good outcome for the City unless it defeats Pickett in the courts.
HOW DID THIS HAPPEN?
The taxes in question appeared on our water bills during the time of City Attorney Silva Borunda Firth. City Attorney Nieman assumed her position in October 2018 and has not only permitted this taxation to continue but has allowed the fees to increase significantly.
How have these taxes on our water bills survived legal scrutiny for so many years?
How will the City pay tens of millions of dollars to water customers if Pickett prevails?
According to Section 14.A (6)(e) of her contract, Karla Nieman may be fired for “Knowing misrepresentation of material facts to the City or other City officials in the conduct of the City’s business.”
Section 14.A (6)(f) stipulates that she may also be fired for “Any willful, knowing, grossly negligent misapplication or misuse, direct or indirect, by Attorney of public or other funds or other property of the, City, real, personal, or mixed, owned or entrusted to the City, any agency or corporation thereof, or the Attorney in the Attorney’s official capacity.”
The statute of limitations for breach of contract is four years.
Stay tuned for Episode 3 of Niemanwatch!