As Kevin Wolff sees it, residents of the unincorporated parts of Bexar County pay 86 cents per dollar of their CPS Energy bills to the utility and 14 cents to a San Antonio city government that doesn’t serve them.
Wolff wants a piece of that money for the county. The city doesn’t want to give it up.
It’s not a new disagreement. Wolff, the three-term county commissioner, has made his case to city leaders for the past six years, to no avail. This year, he’s angling to take the issue to the Texas Legislature.
That’s what prompted Jeff Coyle, the city’s director of Government & Public Affairs, to sound the alarm bells during his August 7 briefing to the City Council’s Intergovernmental Relations Committee.
“While this issue has been talked about a little bit before, it’s never been proposed at the Legislature,” Coyle told council members. Coyle called Wolff’s proposal a “major concern” and said, “We strongly oppose that.”
Here’s the backstory:
The city purchased CPS Energy in 1942 for $33.9 million. CPS Energy pays the city about 14 percent of its revenues every year and has provided the city with $7 billion in revenues over the past 76 years.
The city’s proposed 2019 budget includes an estimated $363 million in CPS Energy revenue, with approximately $40 million of that revenue expected to come from unincorporated areas.
From Wolff’s perspective, the city has access to multiple revenue streams — including sales and property taxes — while the county is limited to property tax revenues. The county commissioner argues that if the city shared even $5 million of that unincorporated-area revenue with the county, it would boost the county’s efforts to provide crucial services to people living in those areas.
“I’m looking at it from a fairness standpoint,” Wolff said.
“From the mothership of the San Antonio company, they feel that CPS is theirs and this is like a return on dividends,” he added. “That logic is sound. However, if you really want to say, ‘How much should that return be?’ and ‘How much of that return is made off others that you don’t service?’ that’s when you start to run into squishy problems.”
The city’s argument always gets back to the unique relationship between the city and the utility owned by its residents. As Coyle frames the debate, CPS Energy revenues are a return on investment to city taxpayers. They also are in lieu of property tax revenue and right-of-way fees that would otherwise go to the city, if CPS were a private utility.
“The county didn’t buy the utility, the county doesn’t do the investment in the infrastructure and doesn’t carry the liabilities of owning the utility,” Coyle said. “To suggest that city residents should give up the return on that public investment is unfair on its face.”
While both the city and county legislative programs for 2019 are still in the developmental stages, it’s possible that those programs will include competing planks on CPS Energy revenues. Coyle said he heard from county staffers earlier in the summer that Wolff’s proposal might make it into the county’s pitch to state lawmakers and that’s why he raised the issue at the August 7 council committee meeting.
Wolff’s father, County Judge Nelson Wolff, agrees with his son on the issue, but seems skeptical about the county’s legal right to challenge the way the city handles those revenues.
“There’s been a concern that people out in unincorporated areas of the county pay about $39 million a year to the city through CPS and they don’t get any services like the people within the city do,” Nelson Wolff said. “There’s always been that feeling that it’s not quite right. But I don’t know if we can do anything about it or not.”
A conflict over CPS Energy revenues would merely be the latest in a series of turf squabbles between the city and county governments over the past few years.
In 2013, the county launched its own library system, BiblioTech. That same year, the county ended its partnership with the city’s Animal Care Services and created its own animal control department.
Early this year, the city and county clashed over the terms of a $106-million contract for first-responder radio systems. County commissioners nearly severed a two-decade partnership with the city before grudgingly accepting the terms of the city’s deal with the San Antonio-based Dailey-Wells.
The city and county also are sparring over the county’s soon-to-open $33-million Justice Intake and Assessment Center, which the city refuses to use because of design disagreements.
Seen in that context, the CPS Energy dispute is about more than revenue. It’s also about power and respect: namely, the power advantage the city will always hold over the county and a lack of respect that some county reps sense from the city.
Article originally published by San Antonio Express-News – Gilbert Garcia