A consulting agency helping Fair Oaks Ranch officials develop new water and wastewater utility rates may need to go back to the drawing board as several city council members were left scratching their heads after seeing rate recommendations earlier this month.
The consulting agency Raftelis was brought on last year to help the city adjust its utility rates after it was clear the city’s water utility revenue was subsidizing its wastewater utility, which was losing money. After months of consideration and four meetings with a citizen group, Raftelis staff suggested a rate change that left some council members less than impressed.
“I think adding that rate and 0-7,000 gallons is causing the actual water bill to look like if you’re using less water, you’re paying more,” Place 4 Councilmember Laura Koerner said. “If you’re using more water, you pay the same. I think if that was not there, and I want to see how the other rates are adjusted. I would be interested to see what the impact on the water bills would be.”
Raftelis Senior Manager Angie Flores explained the agency’s rate change recommendation would begin to charge low water users for their consumption. Currently, water users in FOR are not charged a volumetric rate until they’ve used more than 6,000 gallons. The Raftelis proposal would charge these customers $2.17 per 1,000 gallons of water.
Flores said this change was made with equity in mind for the utility users in the city, with a pricing objective noted by city councilmembers to ensure every customer is paying for the water they are using. Additionally, she said the state water board has recommended charging a volumetric rate for lower water users to encourage conservation.
Adding this charge for lower users would bump the winter bill of a resident who uses 4,000 gallons of water up from $55.08 to $57.28. A resident using 8,000 gallonsin the summer would see their bill jump from $62.70 to $66.60.
However, the average FOR residential water user, who uses 8,000 gallons in the winter and 17,000 gallons in the summer, would see their winter bill jump $3.90 and their summer bill go down $9.30. Further, high residential water users would see their winter bills drop $5.42 and their summer bills go up $1.49.
While Flores said the scenario being presented to the council was the one chosen by consensus from the citizens group, two members of the group spoke before council saying they never recalled coming to any kind of formal consensus.
One member of the citizen committee questioned whether the city even needed to change its water utility since it was already producing a surplus, pointing out the only utility operating at a deficit was the wastewater utility. This piqued the interest of a couple of council members who questioned whether that was feasible.
Place 2 Councilmember Roy Elizondo questioned how the current rates cover the cost of the water being used by customers not paying a volumetric charge. Flores explained it was being paid through the service availability charge based on meter size.
Elizondo said in effect, the cost of water from customers using less than 6,000 gallons is being paid for by everyone else on the city’s water, and he said he wanted to see water users pay for their usage rather than putting the cost on others. He said this was the kind of “transparency” he would favor.
The presentation to city council was not an action item on the city’s agenda, so no action was taken.
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