Wake Village Mayor Mike Huddleston believes that the information withheld from his city and others amounts to fraud, according to his sworn testimony in the form of depositions in the lawsuit filed by seven cities against Texarkana, Texas, and its political subdivision, Texarkana Water Utilities. The plaintiff cities are Wake Village, New Boston, Hooks, DeKalb, Annona, Avery and Maud, which believe they were overbilled and denied water rights.

Huddleston and the other mayors cannot speak about the lawsuit because of a gag order in place by visiting District Judge Jimmy L. White, of Texas' 76th Judicial District. But in depositions obtained by the Gazette, the mayors say plenty and give more insight about the lawsuit, which is being litigated behind closed doors in the trial court on White's orders.

Huddleston, on July 31, 2003, had problems with the accounting of TWU and how cities are billed for their shared water.

"I think that was sort of misrepresented in that way. I think it's fraudulent to know that there was supposed to be an independent audit and that there's supposed to be certain information given to member cities or made to their access, and that was never done. I think it would be fraudulent," Huddleston said.

Huddleston also does not believe that each member city is being paid the correct amount or the same amount for water as Texarkana, Texas, is. He said that part of the 1965 contract between the cities is clear.

"I think they know what the billing should be. And the reason I believe that is because my understanding that the first 10 years that this thing went together we all paid the same. Why did we change?" he said. "... Somewhere in that same timeframe, someone had to make the decision to change the way Texarkana was paying. So why was that changed? They had to know that we paid it this way for a certain time. Why are we changing?

"None of the cities at that time was notified that Texarkana would pay a different rate at that time, to my knowledge, "Huddleston said.

Huddleston also believes that the cities should have water rights. He said this is also a fraud on the part of Texarkana, Texas.

"I think the simple fact of the water rights in Wright Patman to where the City of Texarkana, Texas, applied for a water permit on behalf of itself and other member cities and other cities," Huddleston said. "I mean the application said that. And now to try to say that none of the other cities, 17 cities and things have no rights to that water, I don't think that's a misunderstanding. I think that's just a fraudulent deal to maintain, to let the City of Texarkana, Texas, claim all the water.

"When you apply an application and you have letters from each city, resolutions saying we're appointing you sponsors or whatever it said, on our behalf to apply for a water permit to the Texas Water Board on our behalf, OK. You're the sponsor, your duty is to all of us because we all agreed that you would do it on behalf of all of us. And now to say, no, you don't have any rights when they filed the application and when the permit came back and it's in the bond issue that that's what they've done."

In his deposition, Huddleston went on to say that none of the member cities or the four counties that they're in ever agreed to the filing of the water permit with the agreement that Texarkana, Texas, could charge whatever it wanted to.

"That was never the intention back then. It's not now. It's not even in the contracts that way, in my opinion. What I agreed to, and what the other member cities, and what this thing was done for, is that, OK, it's a regional facility," he said. "We want the water delivered to the point of delivery at whatever it costs, and we want that audit, and we want to be shown exactly what those costs are, and we want that audit done by an independent auditor just like it says. And to refuse to do that stuff, that's not right."

DeKalb Mayor Paul Meadows, in a deposition taken on July 29, 2003, says as a matter of practice, he has to believe that the amount billed DeKalb for water is true.

"And I don't feel like that that has been properly done," Meadows said. He agreed with Huddleston on the need of an independent audit.

"I believe the contract specifically stated that they were to obtain an independent audit to assure me that those figures were correct," Meadows said.

He also believes it is Texarkana, Texas' responsibility to get the audit started, not DeKalb's.

Meadows also thinks the water rights were not administered in a way to benefit the entire area.

"I don't feel like they have properly distributed the profits that have been derived from the operation of that throughout to all the cities," Meadows said of the sale of industrial water to corporations. "... They haven't shared the profits according to the contracts as we originally agreed to."

It is also his opinion that Texarkana, Texas, deceived the member cities.

"... We've pretty well covered the fact that we felt like we were, after discovering this, that we felt like we had been overbilled for the past 20 years," Meadows said.

New Boston Mayor Johnny Branson, in a deposition taken on July 29, 2003, said he does not have any personal facts that Texarkana, Texas, committed fraud. But he questions the billing.

"When we got started looking into this, I believed that the rate that they charged for some of the water and others for water-I believed that it was not the fraudulent part of it. I don't believe that the billing was right. I do not believe it," Branson said.

But Branson said he did not have personal facts that Texarkana knew the amount billed the member cities was false.

Annona Mayor George English, in a deposition taken on July 30, 2003, said he feels the trust given to Texarkana, Texas, was abused.

"... we relied on Texarkana to be competent and trustworthy because of our small cities ... we didn't have the administrative deal that they have," English said.

He wanted each city to be treated fairly.

Texarkana, Texas, failed in their attempt to have the lawsuit dismissed when White ruled the member cities' lawsuit had merit. The case was taken to the 6th Court of Appeals where both sides have already submitted written arguments. Both sides will appear in a hearing on July 1 at the Texarkana-based appeals court to argue their case.

The three justices on the appeals court have overruled Texarkana, Texas' bid to litigate the case in the appeals court in secret. The hearing will be open to the public.