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Growing city's overpumping continues

Wednesday, October 23, 2002 by

By Bob Ochoa

The City of Kyle is racing toward another year of tremendous overpumping from the Barton Springs section of the Edwards Aquifer, according to Floyd Marsh, general manager of the Barton Springs Edwards Aquifer Conservation District (BSEACD). The small city is also unlikely to get a break this week on a $130,000 fine for overpumping from its well, said Marsh.

Only one month into its 2002-03 permit with the BSEACD, the city has drawn over 25 million gallons of its 55-million gallon permit for the year, according to Marsh. Kyle is not within the BSEACD, but is allowed to pump from a well that is within it.

“They’re setting themselves up for what they did this year,” Marsh said. “They’ve pumped 26.6 million in the month of September. Doing simple math, that’s 48-plus percent of their permitted level. I have sent them a letter pointing this out. They’ve got to sit down and talk to us.”

The BSEACD board of directors will meet Thursday and is expected to sign an enforcement order, following a motion adopted unanimously by board members on Sept. 26

The enforcement order and fine are the result of Kyle’s overpumping its permit with the district by 89 million gallons this year. It’s the largest overpumpage by a permitted entity in years, and by far the largest monetary fine imposed by the district. The City of Kyle, it has recently been learned, also overpumped its permit with the Edwards Aquifer Authority (EAA) by about 75 million gallons in 2001 and is expected to significantly overpump again this year.

While the EAA has not yet said how it will deal with Kyle’s persistent overpumping, the BSEACD enforcement order this week will set out a quarterly payment schedule for the city in amounts of $32,281. The first payment is due November 15, said Marsh.

“It will basically spell out in more detail—more factual and legal detail—the motion approved by the board Sept. 26,” he said.

Kyle city council members said following an executive session held last week to discuss the city’s water problems that they had decided not to legally contest the fine, but held out hope the BSEACD would consider lowering the fine.

But as of Friday of last week, Marsh said Kyle officials had not contacted him with any kind of proposal from the city.

“We didn’t offer for them to come in and negotiate the enforcement order by themselves,” Marsh said. “I said no, Mike (Austin water law attorney Michael Gershon who is representing Kyle), that’s not what it is. We’ll talk to you after the enforcement to develop a scope of work for a (water conservation and aquifer recharge) program, planning things that Kyle desperately needs.”

District board president Jim Camp said it is strange that no Kyle city officials have contacted the district recently to discuss their water problems. “I have not heard a word from Kyle officials, not even from the mayor. It appears to me like they’ve got some problems down there.”

Meanwhile, at least three Kyle council members say they have not been satisfied with the way the overpumping issue has been handled by their own city administrators.

“Nobody was doing a complete analysis of what the actual water usage was, and my question is why in that six-month period—after Kyle declared a temporary moratorium on new residential development—was nothing done?” said one council member late last week. “I have been on the council since then and again the issues were water, sewer and supplementing what we already have, and still no action taken by the city . . . and that’s what I’m trying to figure out.”

In one settlement offer attempt, Kyle asked the BSEACD to let it keep about $86,000 of the fine to help purchase more water supplies, but board members have said that would not be fair to the estimated 50,000 users who reside inside the aquifer district.

Kyle’s overpumping spree has got constituents inside the BSEACD hopping mad, said board member Jack Goodman. A neighborly gesture to help the city with a supplemental water supply has turned into a pattern of abuse, he suggested in a recent interview with the Kyle Eagle.

Kyle is the only large permitted user outside the district. The city was allowed in 1998 to withdraw 55 millions gallons a year from a well inside the Barton Springs Aquifer with a condition the permit could be rescinded when the city accessed new water supplies. The permit was renewed last month, but city officials say it, along with two other sources of water, won’t be enough to serve the city’s fast-growing residential population.

Democrats call on Daugherty

To show tax proof

Ozmun says release of liens insufficient proof

The chair of the Travis County Democratic Party has called on the Republican candidate for County Commissioner of Pct. 3 to “show actual proof . . . that he has paid all of his taxes owed to the state or federal government or withdraw from the race.” Scott Ozmun was referring to the 19 liens filed against candidate Gerald Daugherty and his various businesses between 1988 and 1995. Records at the Travis County Clerk’s Office show that 14 of those liens were each released within two years of the date they were filed, many within a few months. Daugherty provided proof to the American-Statesman that the five remaining liens filed by the Internal Revenue Service had been released. Since the IRS is only allowed to place a lien on property for 10 years at a time, the original liens have all now expired. Proof that the liens no longer exist is not sufficient, said Ozmun.

“If Mr. Daugherty really wants to be open with voters, he should provide us with canceled checks, or allow the IRS to tell the public whether or not these liens were actually paid,” said Ozmun. The IRS may comment on cases with the permission of the taxpayer.

“If Mr. Daugherty has dodged taxes by exploiting tax code loopholes and told the public he has paid them, then he should withdraw from the race. ‘Straightforward honest leadership’ does not mean stiffing the public for taxes that are owed,” said Ozmun.

Daugherty is running on his record as a successful businessman. According to the biography on his web site ( ), he was the owner and operator of the “ Austin Sports Center, a retail sporting goods store with three locations, 1976-1981.” Following that, Daugherty says, he was the owner/operator of The Dugout (1981-1982) and then the Pleasant Valley Sportsplex (1984-1999).

William Hammer, Daugherty’s former business partner in The South Austin Sports Center, Inc., did not remember quite the same dates as Daugherty. Daugherty was the registered agent for the South Austin Sports Center, Inc. at the time it was first incorporated in 1976. William Hammer was listed as president and Sharon Hammer as secretary. According to the Secretary of State’s Office, South Austin Sports Center, Inc. filed a public information report on Dec. 31, 1988, again naming Daugherty as the registered agent and the Hammers as president and secretary, respectively.

But Hammer, who now lives in Burnet, told In Fact Daily that he and Daugherty were 50-50 partners and that he bought Daugherty’s share of the business in 1985. He could not explain why Daugherty’s name appeared as the company’s registered agent at the Secretary of State’s Office three years later. “You’d have to ask him. I can’t answer that.” A registered agent has no liability for corporate debts or failures, but must receive service of documents, such as lawsuits, on behalf of the corporation.

The IRS filed liens against Daugherty’s Sportsplex on Feb. 18, July 31 and August 3, 1992 and against Daugherty personally on Oct. 6, 1988. Those are the ones still in question. Two other IRS liens and ten liens filed by the State of Texas were later released. The total amount owed on the liens by Sportsplex, Inc. was a little less than $53,000. According to the IRS, the liens were for unpaid corporate taxes and money withheld from employees’ wages, plus the employer’s share of taxes and Social Security payments. Daugherty’s personal tax lien was for $21,124. The personal lien expired at the end of 1994, and the last unreleased corporate lien expired two months ago.

When In Fact Daily contacted the Daugherty Campaign last week with questions about his business dealings and taxes, campaign manager Mistie Davis said she would have Daugherty return the call. The following day, In Fact Daily inquired again about Daugherty’s response to questions about the dates in the web site biography and Internal Revenue Service liens. The existence of the liens, along with fourteen others that were released, was disclosed by his opponent’s campaign. (See In Fact Daily, Oct. 11, 2002.) Davis then said Daugherty had decided not to talk to In Fact Daily, but that his campaign consultant might respond.

Desiree Brooks, Daugherty’s campaign consultant, called but refused to answer questions about the liens or her client’s businesses. Brooks said, “Really, the campaign needs to be about issues and honestly, I’m not hearing about issues. People are just trying to dig around” to find something negative.

As for the payment of taxes, Brooks said. “I do believe he has receipts for his taxes. The Austin American-Statesman has them at this point. I’ll have to see if I can get a hold of them (for you).” She added that Daugherty “has sold all his business interests. He has proved himself over and over again.” And she credited Daugherty for the defeat of the light rail referendum last year. Books promised to request the receipts, but did not produce them. The following day, the American-Statesman wrote that it had an affidavit from Daugherty stating that there were no liens on property he sold in September. The Daugherty campaign refused to return calls on Monday. On Tuesday, Brooks said the campaign had chosen not to provide the affidavit or other proof of payment to In Fact Daily because the publication is “on a witch hunt.” Ken Vargas, a spokesman for the IRS in Austin, said liens expire after 10 years. The IRS generally files a release of lien when taxes are paid or there is an agreement to pay by the taxpayer. Alternatively, if the taxpayer goes into bankruptcy, the IRS will file as a creditor and seek payment there. But these liens may have simply expired. Vargas said he could not release information on any individual or corporate taxpayer without specific permission from the person involved. Vargas said the only way to really be certain that all of an individual’s taxes have been paid is to have the person authorize the IRS to release the information to the party seeking the information.

© 2002 In Fact News, Inc. All rights reserved.

Conservation district to meet Thursday . . . In addition to considering the problems with Kyle, the Board of Directors of the BSEACD will also consider whether to give T.J. Higginbotham another year to finish drilling a new well. A spokesperson for the district said applicants generally have one year to drill once they receive permission. Higginbotham has already received one extension, she said. If the board grants the extension, Higginbotham would have an additional year to construct the well. The board initially gave Higginbotham permission to drill the controversial well May 2, 2000. (See In Fact Daily May 3, 2000.) He plans to draw 50 million gallons per year from the aquifer to serve a number of area developers.The meeting is set for 6pm at the district office, 1124 Regal Row . . . Rain won’t go away . . . Volunteers from the Real Estate Council of Austin (RECA) worked on inside improvements for Literacy Austin classrooms on Saturday. They had planned to work at the Children’s Advocacy Center also, but will have to reschedule that job due to the rain. RECA celebrates Christmas in October every year by lending a hand to the volunteer agency. Literacy Austin provides basic literacy skills and English as a Second Language instruction for adults, ages 17 or older, who read below the fifth grade level. RECA’s renovation project will be to help build additional classrooms . . . Landmark prepares for topping-off celebration . . . The Landmark Organization, which is building the new Convention Center Hilton Hotel, plans to do a topping-off ceremony next month—with an Austin twist. Landmark spokeswoman Terri Dusek says the tree will be a Live Oak in a pot, not the usual fir or pine. The living tree will stay atop the 31st story of the building for a few days and then be donated to the City of Austin, Dusek says. The celebration is slated for Nov.19-20, with several events planned . . . Fighting back . . . Former Mayor Bruce Todd, APA President Mike Sheffield, and various elected officials will hold a press conference this morning to denounce Ben Bentzin for his for his negative television campaign against Senator Gonzalo Barrientos. The ads show Barrientos during a sobriety field test when he was arrested for DWI last year. Todd, who is Barrientos’ campaign treasurer, released the following statement to campaign supporters “Campaigns bring out the best, and the worst, in people. I’m afraid that the commercials created by Senator Barrientos’ opponent are the reflection of a very desperate candidate” . . . ZAP goes on and on . . . Members of the Zoning and Platting Commission finished their heavy agenda shortly before 11pm last night, after approving the preliminary plan for Medway Ranch Section 2. The Commission also approved historic zoning for the Gatewood House in West Austin. In Fact Daily will have a fuller report on these and other commission actions in the coming days. (See In Fact Daily, Oct. 17, 2002.)


2002 In Fact News, Inc. All rights reserved.

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