WEST TEXAS MUNICIPAL POWER AGENCY BACKS HIGH PLAINS BOND ISSUE AGAINST THE CITY OF LUBBOCK AND LUBBOCK TAXPAYERS FOOT THE BILL

Last week, the taxpayers of Lubbock began paying for lawyers on both sides of the lawsuit in which High Plains Diversified Energy Corporation seeks to issue 1.575 billion in bonds. On one side are the lawyers from the Houston law firm of Vinson & Elkins who were hired by the city to oppose the bond issue. On the other side are lawyers from the San Antonio law firm of Davidson and Troilo who represent WTMPA. The taxpayers of Lubbock will pay 100% of the legal fees to oppose the bond issue. The taxpayers of Lubbock will pay 85% of the legal fees to support the bond issue. How did this happen? It happened because the city is a member of the West Texas Municipal Power Agency and is obligated to pay 85% of WTMPA costs and expenses. Because the city has been forced to intervene and oppose the High Plains bond issue, it is now paying lawyers on both sides of the issue and the fight is shaping up to be a long and expensive one.

On one side of the suit are High Plains, Republic Power Partners and WTMPA who are supporting the authority of High Plains to issue the bonds and purchase the Odessa power plants. On the other side are the Cities of Lubbock and Odessa who oppose the bond issue and allege that High Plains was not legally created in 2008. It is not clear at this point where the Attorney General stands, but my guess is that he will join with Odessa and Lubbock in opposing the bonds.

Regardless of how the suit plays out, the taxpayers of Lubbock will be paying the bill, win or lose. This situation could have been avoided if the city had opposed the creation of High Plains in November 2008. The city should now correct its mistake by using this opportunity to terminate all relationships with the WTMPA. Membership in the WTMPA no longer makes economic sense for the City of Lubbock. The power interests of Lubbock verses the power interests of the cities of Brownfield, Tulia and Floydada have little in common. Lubbock is a growing city with a major university and a population of more than 229,000. The population of the other WTMPA cites combined totals less than 17,500. The non-Lubbock member cities have experienced dramatic population declines in the past 20 years and projections indicate that these population declines will continue in the future. The structure of the WTMPA governing board fails to recognize the huge disparity in population and economic power of Lubbock verses the non- Lubbock cities because it is made up of 3 members from Lubbock and 3 members from non-Lubbock cities. This 50/50 split does not accurately reflect the population or economic status of the WTMPA member cities. Lubbock’s unequal representation on the board was one factor in allowing the creation of High Plains to occur.

And unfortunately, this is not the first time that WTMPA has left Lubbock taxpayers holding the bag. In 2003 WTMPA owed Lubbock more than 5 million dollars and was accused of mismanagement. Back then, Tom Martin saw no reason for Lubbock to be involved in the WTMPA and advocated for Lubbock to pull out of the association. See the story here. Since 2003 Tom Martin has changed his position and does not support Lubbock withdrawing from WTMPA. He was right in 2003 and he is wrong now. The taxpayers of the City of Lubbock have the bills to prove it.