Summary Written by Brandon Vegter, Texas Center for Policy Studies

September 18, 2000

The Board of Directors of BECC held a public meeting at 10:00 am on September 14, 2000 at the El Paso Marriott Hotel in El Paso, Texas. The meeting was highlighted by three events including discussion of the North American Development Bank’s mandate expansion, certification of a water and wastewater project for the city of Laredo, Texas and certification of a water main replacement project for Somerton, Arizona.

In attendance for the Board were Directors Aurturo Herrera (as acting chairman), John Bernal, Lynda Taylor, and Thomas Soto as well as representatives of EPA and SEMARNAP.  Director Bustamante joined the meeting by telephone making possible a quorum.

The meeting commenced with a special presentation to the BECC Board by the Mayor of Ciudad Juarez, Ing. Gustavo Elizondo.  The Mayor’s comments were intended to draw support for the proposed mandate expansion of NADBANK. Mr. Elizondo began by noting some of the common problems Mexican cities face along the border and asked the BECC Board to consider expanding its activities to help address these problems. Mr. Elizondo was especially interested in the possibilities of BECC involvement in a tire-recycling project and light rail proposal for Ciudad Juarez.

After the Mayor’s presentation, Chairman Herrera proposed modifying the meeting’s agenda. The presentations of two candidate projects for BECC certification were moved forward.  The first project, presented by Adolfo Urías, involved improvements to the water and wastewater services in 15 colonias of the City of Laredo, Texas.  Currently, 3,725 people live in these communities and the purpose of the project is to improve the potable water and sewer services to these colonias residents.  The total cost of the project is over $21 million of which more than $6 million will come from Border Environmental Infrastructure Fund (BIEF) funds administered by the NADBank.

After the presentation, Director Taylor raised concerns about portions of the project being located in the Rio Grande’s flood plain.  Mr. Urías assured Ms. Taylor that the plant would be placed above the existing flood plain.  Fransisco Treviño of the BECC Advisory Commission also discussed the possible risk of floods affecting the proposed plant.  However, he noted that the Advisory Commission decided the risks were sufficiently minimized after consultation with the project’s engineers.  Joe Guerrera, a Representative of the City of Laredo, followed Mr. Treviño and urged the Board to support the proposed improvements, noting they would promote sustainable development of the community. Scott Storment, from the Office of the Secretary of State of Texas, then highlighted the priority the state has given the colonias project and applauded the high level of public participation.

BECC staff then presented the second project for certification, which consists of replacing old undersized water mains, valves, fire hydrants, lot service lines, water meters, and meter boxes for the City of Somerton, Arizona. Approximately 40,000 linear feet [12,200 m] of water lines will be replaced. The project is estimated to cost over $3 million, $820 thousand of which will consist of BIEF grant funds.

Following the presentations and public comments, the Board approved both projects.  BECC staff then presented a brief summary of operations in the border region, including 95 projects under development in Mexico and 86 in the United States.

Next, the Executive Committee presented its report to the Board.  Among issues discussed were proposals for BECC certification, ways of increasing cooperation with NADBank, new BECC management, and the need to follow-up certified projects by continuing steering committee involvement.  The Executive Committee decided that BECC’s management should assume more administrative responsibilities and the Executive Committee would soon be discontinued.

Following the Executive Committee report, Victor Miramontes made a brief presentation to the BECC Board.  Mr. Miramontes started by noting that the process of expanding NADBank’s mandate began in November of 1999 as the NADBank Board of Directors examined the limited uses of loan resources.  Mr. Miramontes acknowledged the failure of NADBank to lend these resources. Accordingly, the NADBank Board of Directors decided that NADBank lacks the ability to lend to municipal entities for water, wastewater and solid waste projects. The Board began to look at other areas of lending, during which it made an appeal for public comment. These comments are now available on the NADBank website http://www.nadbank.org.

Mr. Miramontes made three recommendations during his presentation.  First, he urged the Boards of Directors of BECC and NADBank to begin expansion on a pilot basis, while maintaining the priorities of certifying and funding water, wastewater and solid waste projects.  Second, he proposed expanding the geographic boundaries of eligible projects to 300 km, especially on the Mexican side of the border.  The expansion would include cities such as Saltillo, Hermosillo, Chihuahua and Monterrey.  Mr. Miramontes acknowledged that there will be legal issues involved in extending the border economic zone and that Congressional action in both Mexico and the United States would be needed.  Finally, he noted the differences in government support for the border institutions.  In Mexico, President-elect Vicente Fox has identified the NADBank process as a model for extending development investment throughout North America, but especially in Mexico.  The U.S. Senate, on the other hand, recently curtailed funds for the BEIF grants, in his opinion further emphasizing the need for new financial mechanisms and equity alternatives in NADBank lending.

After Mr. Miramontes presentation, the BECC Board shared a few comments on the issue of NADBank mandate expansion. The EPA representative noted that changes in NADBank financing options would require administrative approval and determinations by the IRS, however the Board may expect lower interest rates available in the future.  In October, the U.S. government plans to issue a decision on financing options and share it with Mexican authorities. Lynda Taylor also acknowledges the need for other financial mechanisms, and urged the BECC and NADBank to find resources for solid waste projects.  Ms. Taylor proposed studies on the issues of expansion, and noted that most BECC resources were exhausted by current work.  Ms. Taylor also asked a question about securing other financial mechanisms for the BECC. The Board then opened discussion to public comment.

On behalf of the Texas Center, I presented comments on three issues of NADBank’s mandate expansion.  My comments were meant to summarize the positions detailed in the Texas Center’s policy paper, titled Expanding the Mandate.  First, the Texas Center believes that expansion of the types of projects reviewed by the BECC will create the need for better financing, so as not to diminish BECC’s current efforts. BECC will need to look at possibilities of securing alternative funding. Second, BECC and NADBank should develop a specific list of the types of projects that will be considered as “related matters” or “environmental infrastructure” to reduce confusion and the possibility of wasting time and effort of all parties. TCPS’ comments examine the different types of projects proposed by the NADBank in more detail.  Finally, the Texas Center opposes the expansion of the geographical definition of the border at this time.

Carlos Rincon of Environmental Defense followed by describing the series of meetings he has proposed for examining the NADBank mandate expansion issue.

Victor Miramontes briefly addressed these comments, starting with Ms. Taylor’s question, to which he responded that other mechanisms were possible pending the decision of the U.S. government.  In response to my comments, Mr. Miramontes noted that the NADBank had received the Texas Center’s policy paper and respected our positions on the types of projects proposed and on the discussion of geographic expansion. Mr. Miramontes also welcomed the meetings proposed by Carlos Rincon.

Next, the Board addressed the Technical Assistance programs.  BECC staff reported on the progress of the Sustainable Development Working Group.  The Group postponed a formal vote on the sustainability plan until December. However, under Director Taylor’s encouragement the BECC has examined principals and indicators of sustainable development and proposed applying them on a pilot basis for the Presidio project.

After the General Manager’s report, Francisco Treviño gave a brief description of the latest Advisory Council Meeting.  15 members were present at the meeting.  Maria Josefina Guerrero presented activities related to public participation, Leo Valdez presented financial information, and the Advisory Council discussed issues concerning sustainable development. Mr. Treviño also noted that a co-chair of the U.S. Advisory Commission would be chosen in the near future.

Javier Cabrera presented an award and many thanks on behalf of the BECC Board and Staff to Dr. Rene Franco who is stepping down as Project Development Director.

Next came the General Manager’s report, which emphasized that the budget request for 2001 and 2002 would commit more technical assistance funds to solid waste.

During the final public comment period, a representative of Nuevo Leon urged the BECC Board to expand the geographical definition of the border region to 300 kms, which would include Monterrey. He also invited the BECC Board to host its December meeting in Monterrey.  Javier Cabrera agreed with the need for geographical expansion and said a window was offered in the Charter to include rivers flowing toward the border, which would include possible projects on the Río Pesquería, which flows through Monterrey (connecting later to the larger Río San Juan).  The Board concluded the meeting by accepting the invitation to hold its next meeting in Monterrey.