Response to Taylor on NextDoor

Hi Taylor. Great questions. I will be happy to answer them. I have tried to be as brief as possible below.

  1. What is the current status of the lawsuits? My understanding is the the courts have ruled in favor of WOWSC numerous times, so can we expect the lawsuits to come to a close soon?

a. Toma Integrity (Ffrench, Dial, Sorgen) Vs. WOWSC — decided in WOWSC favor. Judges denied remedies sought by TOMA. Appeals court agreed in 2019 and Texas Supreme Court agreed in Feb 2020.

b. 48292 — originally named “Double F Hanger Operations LLC, Lawrence R. Ffrench, Jr., Patricia Flunker and Mark A. McDonald v Friendship Homes & Hangars, LLC, and Burnet County Commissioners Court” and then recaptioned and filed as “Rene Ffrench, John Richard Dial, Stuart Bruce Sorgen, and as Representatives for Windermere Oaks Water Supply Corporation v. Friendship Homes & Hangars, LLC, WOWSC, and its Directors William Earnest, Thomas Michael Madden; Dana Martin; Robert Mebane; Patrick Mulligan, Joe Gimenez, Mike Nelson and Dorothy Taylor” — Final motion on the legal merits of the case were filed Wednesday of this week. It is available here. Dial, Ffrench and Sorgen can drop the case any time so that the corporation’s legal defense fees can stop.

c. Two cases filed to protect the company’s attorney-client privileged information (and one of which was settled positively with the Attorney General’s office before intervention by Danny Flunker) — withdrawn. No longer in court. See one final document here Another should happen any time.

d. Public Utility Commission Rate Case — Ratepayer Representatives walked away from mediation in January. An offer from the company for settlement in lower rates was ready but never entertained by ratepayer reps Josie Fuller and Patti Flunker because they dropped out of mediation. Case will continue through July. Ratepayer Reps can re-enter mediation to consider offers of lower rates or drop the case to stop additional legal fees. You can see the document describing discontinuance at this page

  1. How were the rate increases calculated?
    WOWSC used the spreadsheet analysis tool created by the Texas Rural Water Association for use by its hundreds of member water systems across Texas. The same spreadsheet was used by WOWSC in 2017 for a rate hike in 2018. It had been tailored specifically for WOWSC in 2017 by the TRWA, WOWSC board members and the water company manager. All documents about the calculations are available on the Public Utility Commission website here:
  2. With the increase, how long was it originally expected for the increase to remain to pay off the legal fees?

The Board had hoped the 48292 case would end in mid-2020. Mediation was attempted and is legally considered ongoing to this day. The Board wanted to lower rates in September 2020 but could not given the status of the case and mediation. See item 1b above. Also see item 1d because all legal fees incurred in defending the rate increase can be judged as being recoverable in the form of higher fees.

  1. How much longer do you plan for the rate increase to remain in place?
    The Board wants to decrease rates as soon as it responsibly can but the people suing the corporation — Ffrench, Dial, Sorgen in 48292 and Fuller/Flunker in the rate case — hold the cards. Their legal complaints against the company continue despite efforts at and offers of mediation. The rate increase provided about $16,000 per month in additional income to the corporation. The company pays about $20,000 per month to its law firms. (We were able to save the corporation about $24,000 per year by restructuring loans last year.) We also are aggressively pursuing the insurance company for about $300,000 it should pay. Contrary to what WOWSC opponents say, the truth is that the insurance company has NOT denied coverage. It simply has not responded despite a year of our asking for a decision.

All of this is in the president’s report which is available here and will be provided at the annual members meeting as well.

I hope that helps.

Best regards,
Joe Gimenez
PS — Please vote for Gimenez, Nelson and Schaefer. Our accomplishments and plans for WOWSC are available here:

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