An eighth rural water district has been approved for Sequoyah County.
Sequoyah County Water Association, which serves customers in Vian and other areas, was happy operating as a water association and wasn’t looking to change its entity status. But in 2022, the Oklahoma Legislature passed a statute that required a water entity that wants to apply for and receive federal loans or grants, it must be a rural water district, attorney Marc Bovos, who represents the SCWA, told the Sequoyah County Commissioners during a public hearing last Monday.
“For many years, [SWCA hasn’t] been eligible to get money from the Oklahoma Water Resources Board, which has been an entity that would give grants and loans,” Bovos told the commissioners.
“They’re a big district. We represent a lot of districts. They are a progressive-minded district that does a lot to improve their system. They won’t be able to continue to improve their system, to expand the lines as they have historically if they don’t make this change,” Bovos said.
Bovos acknowledged there have been some concerns regarding what would happen to SWCA’s obligations or contracts if the entity becomes a rural water district.
But from the SWCA’s perspective and Bovos’ reading of the law, “things won’t change in that regard,” the attorney said. “In fact, the contracts they have with Vian and others are pledged to the govern- ment as a resource of repayment for the current loans that they already have. The government has approved this request, in fact, telling us they’re not going to give us any loans or grants if we don’t do it. So they would not approve of the change if it was going to jeopardize the contracts they have in place that result in revenues that pay back the loans.”
Bovos told the commissioners the SWCA views the entity change to Rural Water District #8 as “simply changing the name,” and emphasized that after becoming RWD8, the entity will continue to “business as usual … no change” when it comes to honoring its current obligations.”
“It’s just something they have to do to keep moving forward,” Bovos said. “We have boundaries that are drawn … [and] we’ve been very careful to not go into anybody else’s territory.”
There are currently seven rural water districts in the county, with SCWA being the only remaining association.
Reassurances
Despite reassurances by Bovos that nothing would change, other than the entity name, there was still skepticism by Vian Town Administrator Keith Boshers.
“When the town of Vian received that certified mail last Thursday, we were kind of caught off guard,” Boshers said during the public hearing. He said he reached out to Bovos’ office “looking for some clarification.” All we wanted to know is how does it affect the contracts as they stand? As it stands right now, when the association changes to a district, does that contract go away, does that contract get transferred over?”
Bovos defended not returning Boshers’ telephone calls because of an active lawsuit between the SWCA and the town of Vian. As the attorney of record for the SWCA, Bovos said it would be inappropriate for him to have spoken with Boshers outside the presence of the town’s attorney.
Bovos cited for the commissioners a legal statute that requires the association/district to have “the same obligations they had before, and we have no intention of trying to change the contract because of this change. We read this statute to say, all the rights, obligations, responsibilities of the Sequoyah County Water Association that exist, if this new district is formed, will transfer to the new district. They’ll be the very same — obligations, rights and responsibilities.”
Sequoyah County District Attorney Jack Thorp said he and Assistant District Attorney Andy Williams agreed. “That’s our understanding and recommendation,” Thorp said.
“When the association moves to a district, the district is now considered a unit of the state government, according to the Oklahoma Rural Water Association,” Boshers told Bovos. “Is that how you understand it, Marc?”
Boshers then asked Thorp, “so if the district fails or struggles and fails, does that responsibility, the liabilities, now become the responsibility of the taxpayers of the county and the state?”
“I’d assume it would have to in some form,” Thorp said, but acknowledged he had “never seen that happen. The government when they give them money, they make sure … when they take this money from the government, that they’re going to charge rates that’ll make sure that they don’t fail to pay their obligations.”
“That the liabilities would fall back on the taxpayers of the district?” Boshers asked Thorp.
The district attorney recalled “some issues, not in Sequoyah County,” when liabilities had to be covered.
“Not necessarily from the state, but there’s been other methods that have been utilized in order to cover specific issues like that,” Thorp said. “When we look at a water district, we look at it as a state entity. But we don’t represent water districts like we represent county entities. There are safeguards in place from the Legislature, given the most dire issues that come up, but this is a very healthy water association.”
“So it’s your understanding the state taxpayers wouldn’t have to absorb that if it did go south?” Boshers pressed.
“That’s my understanding,” Thorp said.
The commissioners then unanimously approved incorporating and organizing Rural Water District #8.
