CWSC Accused of Price Gouging

By Will Johnson

Messenger Reporter

HOUSTON COUNTY – The past issues of the Consolidated Water Supply Corporation (CWSC) have been well documented over the past year and seemed to have settled down from a boil to a simmer. During the Tuesday, Aug. 9 meeting of the CWSC Board of Directors, however, the heat was turned up to 10 as a local businessman alleged the corporation in general – and specifically CWSC Manger Sherry Reed – had engaged in price gouging.

As the meeting got underway, the first agenda items concerned customer complaints. The initial CWSC customer listed on the agenda was not present so Board Chairman John Massingill moved to the second customer on the board’s agenda.

Kevin Holbrook, owner of Holbrook Electric Co. came forward, addressed the board members and thanked them for allowing him to speak. Before he got into the meat of his complaint, Holbrook distributed several documents related to the installation of a new water meter.

The first page was a copy of an e-mail he had received from Reed on July 7 which detailed a breakdown of the installation costs. The e-mail showed he was charged: $408 for a membership fee; $1,720 for the meter installation; $30 for an easement fling fee; and $5,670 for 1260’ of 2” PVC pipe.

“The first problem I had was the membership fee and the meter installation (fee). You can call it what you – you can call it a brass monkey – but I’m not getting something tangible for $400. You can call it what you want, but that’s just going to the installation. So, it’s basically $2,100 for the installation. You can agree or not agree,” Holbrook said.

The second page of the documents showed several other water companies in the area and what they charged for a water meter installation. Pennington Water showed a cost of $600, Rusk showed a cost of $700 plus boring (if needed), Walker County showed a cost of $950 plus boring (if needed), Melrose Water Supply showed a cost of $770.85 plus boring (if needed) and Appleby Water Supply showed a cost of $1,000 plus boring (if needed). The five companies listed by Holbrook averaged out to a cost of $804.17 while CWSC had charged him $2,128.

The third, fourth and fifth pages of the handouts detailed the cost of digging the trench and laying the PVC pipe. The first page showed what Holbrook claimed he would pay if he was installing the water meter himself. He had commented earlier this type of work was what he did for a living with his company and added he felt qualified to speak on the expenses.

The third page provided a breakdown of the pricing and showed an auto meter at $200, other parts for $100, labor expenses of six hours at a cost of $22 per hour and usage of a backhoe for $150. The fourth page itemized the piping at 69 cents per foot for 1260’ for a cost of 869.40. It also showed a cost of 16 hours of labor at $22 and usage of trencher for $500. All the numbers added together gave a grand total of $2,276.

The fifth and final page showed a breakdown of costs for CWSC. The document showed the 1260’ feet of PVC at 69 cents per foot as $869.40, the trencher usage at $500 and labor costs of $4,300.60. The labor, according to Holbrook, equated to four men – working four hours – at an hourly rate of $268.70. All the numbers added together equaled the $5,670, shown on the original invoice.

Holbrook said he had talked to Reed about the bill and commented, “The (CWSC) webpage says this is a non-profit (corporation) and you’re not just making a little bit of money, you’re knocking people’s heads off. A young couple coming into the community – working at TDCJ and getting a trailer house – how are they going to afford $2,100 (membership fee plus Installation) for water when it’s on the front of their property?”

“I don’t know her employees and that’s not why I’m here. I don’t know if they’re taking her down a dirt road or if she’s going down a dirt road, but it’s her responsibility,” he added.

As the meeting continued, Holbrook indicated he didn’t understand how the board members let her get away with this type of practice. “There are evidently three or four of you (board members) who are on her side, or you’re friends. I would say she is not being much of a friend if she is putting y’all on the hot seat like this. This isn’t the first time that y’all have had to call Sherry Kay to the backroom. You’re not going to fix that. With all the nepotism and stuff going on here, it is not going to be fixed. I don’t know the guys who work here and they might be the best guys in the world, but when you have family, you cannot justify (certain practices). If she was in private practice, it would never happen,” he said.

Reed and Holbrook began to engage in a back and forth about the cost of the PVC pipe and whether CWSC was actually a non-profit organization.

“You’re making it sound like I’m quoting a price for you different than the guy next door,” Reed said.

“Something’s happening to the money. If you’re doing everybody like me, there ought to be money running out of everyone’s ears. It shouldn’t be $2,100 because there ought to be about $2 million in the bank. There is no way, I or any of y’all (board members) could treat people the she does and get away with it. There are nothing but horror stories, if you talk to anyone in the county,” Holbrook replied.

“There is nowhere to go,” he continued. “I’m telling you, every time something comes up, with all the family working here, it just has a bad feel to it. Every time something comes up, the family issue comes up.”

Will Johnson may be contacted via e-mail at wjohnson@messenger-news.com.