The City’s “Slush Fund”

by Max Grossman

If you pay a monthly water bill like I do, you will notice a tax levied by the Environmental Services Department (ESD) of the City of El Paso.  I have attached my last water bill and circled the tax in red. The City vehemently denies this is a tax, so it appears on our bills as “FRANCHISE FEE (NO TAX).”

Joe Pickett, a former Texas State Representative and City Council Representative, is suing the City for illegally levying a tax through our water bills. I have attached a copy of his pleadings from October 2020.

He filed his lawsuit after noticing that the “franchise fee” increased by 50%, and he tried for two years to get an explanation from the City but received no reply.

On December 28, the 8th Court of Appeals ruled that he has standing to sue, dismissing the City’s claim of governmental immunity.

Cities sometimes impose a fee through private utilities in order to be reimbursed for wear and tear on streets caused by the vehicles that collect our trash. But Pickett claims the City is illegally levying a tax for other purposes. The City’s FY 2020 budget earmarked $6.6 million from the “franchise fee” for street maintenance, but $4.0 million were allocated for equipment for the fire and police departments.

Now that the 8th Court of Appeals has affirmed Pickett’s standing to sue, the case will revert to the trial court where a judge will rule on its merits.


Pickett tells me he filed his lawsuit in October 2020 but City Attorney Karla Nieman did not inform City Council for three months—not until January 2021. Why did she wait until after Mayor Leeser assumed office? Was there a strategy to delay informing City Council for as long as possible?


Pickett’s lawsuit calls into question two other fees appearing on our water bills. There is a $5.00 “Environmental Fee” that the City refuses to explain. There is also a relatively recent fee on the water side of our bill called a “City Franchise Fee” that started at $0.77, increased to $1.24, and is now $1.33. If the City cannot justify these fees, then they are taxes!

Picket alleges that the three taxes on our water bill amount to a slush fund of about $30 million, courtesy of the taxpayers of El Paso, and as of yet none of this has been questioned by City Council in open session.

In my case, the City’s slush fund costs $12.33 per month, amounting to $147.96 per year.

Go Joe!

You can listen to a discussion about the lawsuit with Representative Joe Pickett, Dr. Max Grossman, and me, my name is Rich Wright, at El Chuqueño Presents Almost Live, on Spotify, or wherever you listen to podcasts.


  1. I remember when the franchise fee was assessed against EPWU and added to our bill. Since the city owns EPWU, it looked to me like charging my car a monthly rent to use my garage.

  2. It is nice to see someone finally addressing this robbery. Remember when the City Budget used to cover flood control, and they passed that along to us as EPWater customers? We all think our water bills are so high because we are in the desert, but we are also paying way too much for sewer and garbage, and all of these fees!

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