Published: May 08, 2008 09:34 am         

County not in favor of BRA divestiture proposal

Everything is still on the table – BRA staff asked to explore another option.

By Libby Cluett
lcluett@mineralwellsindex.com

PALO PINTO – In a preliminary public statement, Palo Pinto County Judge Mike Smiddy responded to the Brazos River Authority board of trustee’s recent decision to investigate an alternative option to divestiture at Possum Kingdom Lake.

Since last July, the BRA board of trustees has examined divestiture options. This action stems from the last state legislative session, which brought the issue of divestiture to the forefront and urged the BRA to begin looking at ways to divest itself of residential land holdings and undeveloped areas at PK Lake.

According to BRA board Secretary Wade Gear, divesting these properties will enable the BRA to focus on its mission – developing water to help meet the water needs of Texas communities.

However Palo Pinto County could take issue with the board’s latest option, which came out of the board’s April 28 quarterly meeting. It looks at “an all-inclusive bid for BRA property outside of the Federal Energy Regulatory Commission project area and excluding any property necessary for current or future BRA operations,” according to BRA Manager of Government and Customer Relations Matt Phillips.

In an initial statement issued Tuesday Smiddy stated, “The recent decision by the board of directors of the Brazos River Authority to investigate the possibility of an all-inclusive sale of BRA land holdings will not be taken lightly by Palo Pinto County.”

Phillips and Public Information Officer Judi Pierce said looking into an all-inclusive sale does not remove any topics from the table, it simply gives the board another option to examine.

The BRA board directed staff to investigate the option for a public bid for an all-inclusive sale to one party, versus offering lots for sale to individuals. However, they still want such a sale to protect lessees existing lease rights.

“We are looking at the options of what could be included in the sale as well as making sure leases are protected,” said Phillips.

“Not only would they have protection for the rights they have in their current leases, they would have the ability to purchase their property,” said Phillips.

A lot of this has come out of a legislative mandate for the BRA to “extricate itself from the business of property management,” according to Phillips.

Originally the BRA looked into selling lots on an individual basis. While Pierce and Phillips maintain that option is still on the table, they say it presents complex problems.

“The individual lot-by-lot process was like a ‘to do list.’ The costs associated with the process – including legal fees, property surveys, platting, doing appraisals and hiring staff to help – were very high,” said Phillips. “It’s likely those kind of costs could add up to millions of dollars.”

He said that adding to the difficulty and costs involved with selling via a lot-by-lot process is that the BRA has no idea how many lessees would be buying their property and how many would continue leasing.

“It makes entering into a lot-by-lot divestiture process very difficult when consider you have to make the process for everybody but have no idea how many may buy,” Phillips said.

“Not knowing who will buy [means] we could end up with a checkerboard pattern,” Phillips said of a plat of the lots they sell and those they continue leasing. “It’s difficult to manage and certainly does not get BRA out of property management.”

The costs involved with divestiture on a lot-by-lot basis could result in the BRA having to develop a real estate department to manage everything, according to Phillips, which also “does not accomplish the purpose of extricating the BRA from property management.”

Also, this could present a worst-case scenario, according to Pierce, in which the BRA could go through all the expenses involved and no one buys.

The BRA’s dilemma could be compared to one of the labors of the mythological hero Hercules. One of his tasks was to slay the multiple-headed Hydra, which according to some versions would grow back two heads in the place of any one cut off.

“Everytime we turn over a rock, there seems to be two more rocks,” said Gear who is a real estate broker.

“The divestiture process on a case-by-case basis could have serious tax consequences for the people in Palo Pinto County even though the county collects taxes on land and improvements from the leaseholders at PK Lake,” he added.

“The board has asked us to look at an option – not ignore an option – just look at it,” said Phillips who added that the board is only interested in options “that protect the interest of everyone living at the lake.”



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In the statement Smiddy issued, he stated: “It is important for residents and property owners at Possum Kingdom Lake to know that their county government intends to act in their best interest. It is also important for the people to know that statements reportedly made by BRA staff regarding negotiations on various issues, including county maintenance of BRA roads, are not accurate. Hours and hours have been spent by Commissioner Ed Laney and others reviewing existing and proposed operations. No problem has ever existed between the local BRA employees and the current precinct maintenance operations.

“Following a lengthy meeting with BRA staff in March, a statement of position regarding the road issue was developed and forwarded to the BRA. Questions by their staff were addressed through the exchange of e-mails until April 23. At no time was there any indication that the BRA staff did not ‘understand the options they (the county) have given’ as stated at the board meeting,” Smiddy said in his Tuesday statement. “The county was and is willing to continue working on an interlocal agreement with the BRA to address the road maintenance and plat issues.”

“A more complete response and position will be made after full discussion of the issues at the May 12 Commissioners Court meeting,” Smiddy stated, at which time, “Approval will be sought at that time for release of copies of the statement of position and e-mail communications.”

In response, Phillips said he felt negotiations with Palo Pinto County officials were gong well.

“We were quite caught off guard with the county’s statement,” he said. “I feel like we’ve been negotiating and engaging well with the county including complex discussions on platting.”

“Negotiations were initially stand-offish because of the complexity and understanding between the county and BRA,” he said.

“They’ve improved over the last several months,” he said he told board members in the last meeting. “Prior to the board meeting, we exchanged e-mails with Judge Smiddy because there were certain things we didn’t understand.”

Phillips said he hopes looking at this option, “doesn’t represent a set-back” with the county and said he hopes they still want to talk.

“The bottom line is we don’t understand how the board’s decision to look into this alternative should negatively effect us continuing to talk about these issues,” he said.