City gas system sale goes to polls

By Breyana Segura - Chief Staff Writer | April 23, 2025

“This is an item that will be hot on the ballot…”

Bingo permission also up for vote May 3

Early voting has begun this week and registered voters in Pearsall will decide whether the city will sell the municipal gas system and allow Bingo games inside city limits.
City Manager Federico Reyes told councilors in January that according to Texas Municipal League (TML) legal counsel, an election must be held by a municipality to legalize Bingo.
Texas voters approved a constitutional amendment in 1980 allowing the legislature to authorize and regulate Bingo games conducted by a church, synagogue, religious society, volunteer fire department, nonprofit veterans’ organization, fraternal organization, or nonprofit organization supporting medical research or treatment programs, subject to a local election.
Councilor Ramiro Trevino said at the time that he had been approached by a local business owner who had expressed interest in bringing the popular game to town.
“I have an owner here who is interested and I have been working with him,” the councilor said. “He wants to get a Bingo going two or three times a week. Of course, there are regulations that have to come from the lottery commission. I know this is an item that will be hot on the ballot and do not think we will have a problem passing. I am in support of this item.”
Reyes said state law requires that proceeds from Bingo operations be tied to a nonprofit organization.

“I am not an expert but it will have to be a charitable organization,” the city manager told councilors.
Should the majority of qualified voters decide to legalize Bingo games within the city limits, the legalization would take effect on the fourteenth day after the date of the election canvass.
Following an extensive review of the city’s gas utility system by independent consultant Jeff Snowden, councilors made the decision to bring the potential sale of the system to eligible voters.
Snowden’s study revealed that during the 2024 fiscal year the city only sold 59 percent of the gas it had paid for, with remaining 41 percent unaccounted for.
Various sources can account for the loss of gas, including measurement and accounting errors, stolen gas, and pipe leaks, according to City Hall.
“That could be due to leaks in the system but that is a large volume of leaks,” the consultant said during a Tuesday, January 14, meeting. “More than likely it is due to customers that are receiving gas service and are not being billed correctly due to faulty meters.”
The city administration said expenses currently exceed gas system revenues. Furthermore, the increased costs of regulation with a decreased customer base, coupled with capital expenses, has made it difficult for the city to continue to provide the same level of service at the current rate structure.
According to the current fiscal budget, the city is projected to spend $629,000 in operating costs for the utility system, of which $300,000 will be allocated to purchase natural gas from the wholesale provider, West Texas Gas (WTG).
“Almost half your budget goes to your municipal wholesale provider,” Snowden said. “When you look at the total revenue versus the expenses going out, you can see that your gas system is very constrained and at this point you are relying on subsidies from either the general fund or other utilities to continue to operate. The point is the gas system has lost some customers and your revenue is very flat.”
Councilors learned there were 1,106 residents receiving the utility; in 2014, but that number dropped to 801 in 2024, an average loss of 31 accounts per year.
Snowden also said that in 2014, there were 694 residential accounts and that number declined to 460 in 2024, representing an average loss of 23 accounts each year.
The city has recorded a loss of 22 commercial gas service accounts over the past ten years.
Councilors were told that if the city keeps its municipal gas system, a proposed rate increase would be imperative to accommodate capital expenditures crucial for the upkeep of the infrastructure.
Reyes provided councilors with an estimate for the replacement of residential meters in the city and noted the current budget does not allocate funds for what he described as a substantial project.
“The estimate for meters, which is not in the budget, is $295,000,” the city manager said. “This is just for the replacement of residential meters. For the installation of meters, it is an additional $23,000.”
Reyes said that 273 of the current meters are not being read correctly.
If voters agree to the gas utility sale in the May 3 election, the system will be offered to the highest bidder.