From Staff Reports

Pct. 1 Councilwoman Susan Hale recently answered a list of questions from Jackie Sawicky, admin of the Concerned Citizens of Navarro County Facebook page. The group was formed last April to advocate various concerns regarding the Riot Blockchain bitcoin mining facility coming to Navarro County.

Posted below is the emailed Q&A between Councilwoman Hale and Sawicky.

Sawicky: Thanks so much for reaching out. Our organization’s members have a LOT of questions. We asked for a town hall meeting to have a public discussion about our legitimate concerns, but Mayor Don Denbow flatly replied “Denied.” Perhaps you can provide answers to their questions:

Hale: You were denied because it isn’t a city regulated issue, and he answered that way after the third time you requested it. I know it was abrupt, but I heard the way you kept asking him. I understand your passion and drive to know, but there is a point where you have to understand who is in charge of what.  

Sawicky: How much water will the bitcoin facility use? 

Hale: The estimate is 2 million dollars a year in water. We are legally required to sell to wholesale customers water at the same rate as we do anyone in the city limits. They obviously will not have to pay sewer charges because they would not be connected to city sewer.

Sawicky: And why, if they’re doing immersion cooling, do they need water? 

Hale: Not sure.

Sawicky: When was the city/any city employee/elected official initially contacted by Chad Harris/Whinstone/Riot regarding plans to operate in Navarro County? 

Hale: I can only answer for myself, but I learned of this proposed project in executive session in December or the second meeting in January. It may have been earlier, but nothing more than the name of the project and capital investment and that it would be in the county. Executive Sessions are protected by attorney client privilege, which I cannot break. I can say I knew it was cryptocurrency most likely in January.  Also, I was absent for the first meeting in January, so I have no knowledge of those discussions.

Sawicky: Who was contacted? 

Hale: Don’t know, but I would assume John Boswell, who is the County and City’s Economic Development Director.

Sawicky: Are there records of those discussions?

Hale: If there are and you asked for them in your records request, they would have been supplied unless they are subject to attorney-client privilege. 

Sawicky: Did Chad Harris et al ask the city for anything that they turned down?

Hale: Not to my knowledge. I am not trying to be cagey, but I can’t think of anything.

Sawicky: Was any research done on bitcoin mine operations by any city employees or elected officials prior to the announcement of the “economic development?”  

Hale: I did research in the few days before the announcement. Basic info. on crypto and problems because I knew they require lots of energy and cooling water. (aside comment — I am not sure when I did all of this research, but it would be in the week of the announcement). Once I went down the rabbit hole, I looked at upstate New York, I read the article by Benetton, et al,  that discussed high electricity use with crypto mining.

Sawicky: Why would Navarro County/Corsicana not require economic impact and environmental impact studies on any kind of new industry, especially one this large? 

Hale: I believe the City does, but in this instance you would have to ask the County. There are differences in how counties can regulate as opposed to cities.

Sawicky: Why does Priority Power Management own the land intended for the operation and not Chad Harris/Whinstone/Riot? They were mentioned as the energy broker in the press, but not the owner.  

Hale: Not sure

Sawicky: Is Chad Harris asking for a 100 percent tax abatement as he has in Milam County and if so, for how long?

Hale: I don’t believe they are at this time. Any other knowledge of this would fall under attorney-client privilege to my knowledge.

Sawicky: We’ve experienced several droughts that heavily affected our water supply. Is a commercial consumer required to decrease consumption in those situations?

Hale: I have lived in Corsicana for almost 20 years (my family moved here before I did), I can only recall one drought where water restrictions were required. Commercial and Wholesale customers are limited in times of severe drought, which means that the County folks who are supplied water from the city through their suppliers are some of the last to get limited. What that means is that water that the taxpayers of Corsicana OWNS would have to restrict their usage before someone in the county — go figure.

Sawicky: Were any background checks done on the CEO? 

Hale: Not to my knowledge.

Sawicky: Was there any input from the local community?

Hale: The AG (I believe) has said that development deals have the right to be done in executive session to avoid another locale from gaining an advantage on negotiations. I mean it wouldn’t be fair if we had to say in public we would be willing to sell this property for $5 and then City Y could say, ‘Okay we will sell at $4.5.’ I had a hard time accepting this because I want it to be public information, but I understand this rationale.

Sawicky: Are you aware of the recent moratorium on new mines in NY state, due in large part to the increase in energy costs in the area of a mine?

Hale: Okay, this is going to be my favorite part of the answers. Yes, I have read many articles on this and discovered the following:

1. In these instances, electricity was provided by the municipality. The municipality would buy discounted power from the hydroelectric dam owned (by the state, I think). When individual miners set up shop in vacant storefronts and homes, the amount of energy required to power the town increased dramatically — much higher than the needs they anticipated. Then the municipality would have to go onto the free market exchange to buy power at a much higher demand cost, which resulted in an average increase of $10 in cost to monthly electric bills. Now, I know we are all struggling right now, but let’s get to facts.

2. This company does NOT buy water from the city of Rockdale (now this is per the CEO and I haven’t verified), so why would there be an increase in their water bills? But I believe we are selling them water just like we would have sold water to a water bottling company that was looking at Corsicana. So fixed costs v. variable costs — I actually think this would lower the water using citizen’s of Corsicana water costs.  It costs x amount of dollars to have a water treatment facility, that would be fixed costs. Those would stay close to the same — you don’t need a bigger plant at that consumption level.  The only costs that would change would be the cost to treat the water, which is built into the cost per 1000 gallons.

I’ll be happy to do some more research on how much we average per day out of Navarro Mills, which is from where this water would be coming.

Are you aware that energy costs here in Texas are *already* being affected by the influx of “miners?”

This would be about unregulated, small scale miners. I am all for the person next door figuring out how to make some extra money, but these are not people who we are dealing with. They contract with ERCOT and shut down at a moments notice. I believe the next article mentions that this company did that the entire time of Snowmageddon (it may have been this one).

Sawicky: Have you read this article?

Hale: This would also be about unregulated, small scale miners.

Sawicky: How do you personally believe this is a positive for our county, rather than a net negative?

Hale: This is not for me to say as an elected official because it isn’t in my purview, BUT I see the positive and the negatives:

1. I am not a fan of crypto because of some of its connections to the dark web type activities, but previously art was used as a way to exchange “currency.”  

2. Do I invest in crypto?  No, because of the above, but I have many friends who do.  

3. Do I think a $1 billion investment will be positive to our community? YES. That is approximately 25 percent of our tax base. With the no new tax revenue rule, your county and Dawson ISD tax rate would have to go down. Can’t help you with the valuations because they are insane right now, so that doesn’t mean that they would go back to pre-2022 amounts — although I am trying. We all need some relief.

4. I also think the ability for Navarro College to be able to offer four-year degrees would be a huge benefit to our community.

5. There are others, but I am not trying to shill this company. I am just trying to figure out what can our community gain. I’m not sure about jobs and where they would come from, I know people who have to come here for even a short duration would spend and create sales tax revenue and hotel occupancy tax revenue. This has nothing to do with what I know from my position, but only my feeling.

Sawicky: How much/what kind of research into this technology did you personally do in order to reach this conclusion?

Hale: I think you can see that I did research this extensively, and I have cited it above.  

Sawicky: Thank you for being the very first elected official to respond to our emails after a month of organizing, speaking, calling & reaching out!

Hale: Actually, Pct. 3 Councilman Chris Woolsey spent an immense amount of time on this after the announcement, and he privately responded to someone in your group.

Sawicky: We really appreciate you answering these questions. Many in our group of over 470 local residents are very disheartened by the lack of transparency in this matter, so anything & everything you can share would be great!

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