- Associated Press - Saturday, March 1, 2014

LA VILLA, Texas (AP) - Nearly two months after a dispute over water bills shut down four schools in a small South Texas town, the district and city officials still have not signed a longer-term deal, even though the sides have apparently agreed on a new rate.

While La Villa municipal officials and the district agreed in principle to a new monthly water rate of $10 per student, an agreement has not yet been signed and La Villa’s mayor is unhappy, The McAllen Monitor reported Saturday (http://bit.ly/1gJbxu1 ).

“It’s going to hurt the city, absolutely,” said Mayor Hector Elizondo, who told the newspaper he had been overruled by a majority of aldermen who chose to forgive a $75,000 debt the city believed the school district owed.

The dispute erupted after the sides agreed in 2012 to a monthly surcharge of $6 for the district, but the city unilaterally increased the price to $14. The district continued to pay based on the agreed-upon $6 rate. So over the Christmas break, the city - which had been calculating back payments and interest based on the $14 surcharge - shut off the schools’ water supply, forcing the district to close its four schools for three days after children were supposed to return from the break.

Elizondo has said the city needs money to repair 24-year-old water and sewer facilities that have been cited for 65 violations by the Texas Commission on Environmental Quality, including a failure to maintain equipment to prevent water contamination. The mayor says engineers have estimated it will cost about $7 million to overhaul the system.

The city, though, does not have the money. It has just 450 residential connections and no significant commercial buildings aside from a gas station convenience store. The school district and a detention center are the only two entities that can provide the revenue. The East Hidalgo Detention Center, a private jail, pays $22.50 per inmate per month for water. The city has been turned down for a grant-loan combination from the state.

“If it continues the way it is the whole system is going to collapse, and then there will be no school and no city and no prison,” Elizondo said in January.

Elizondo believes the city could be forced to dissolve if it is unable to pay its bills.

But School Board President Noe Castillo disagrees. While he concurs the tax base is low, he said the city shouldn’t be forced to dissolve.

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Information from: The Monitor, http://www.themonitor.com