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Unfunded mandates cause city to raise water/sewer rate
City's base rate had not been touched in 19 years
The rising costs of drinking water procurement and treatment has caused city leaders to raise the base water and sewer rates for the first time in almost 20 years. Since 1991, the base rate for the first 2,000 gallons used for each water and sewer was $7.50 per connection.
To cover the rising costs of procuring, treating, delivering drinking water and treating and removing sewer water, the city is looking to raise both base rates to $10.25. This rate will still cover the first 2,000 gallons of water and sewer usage per connection.
"Unlike other city services, the water and sewer fund operates solely on water and sewer charges. What residents and businesses pay for is what the city uses to pay for water and sewer," said Gary Jackson, assistant city manager. "The city's philosophy is that those rates should support the expenses that it takes to operate the water and sewer operation – treat the sewage, deliver the water. The rates are set to cover the cost."
The rates become effective when city council passes the fiscal year 2010-11 budget.
Uncontrollable expenses
The per-thousand gallon rate residents pay after they cross the 2,000-gallon threshold will also rise for both water and sewer usages. The per-thousand rate for water after 2,000 gallons will rise from $3.57 to $3.96 per thousand gallons. On the sewage side, the per-thousand rate for sewer after 2,000 gallons will rise from $3.85 to $4.27 per thousand gallons.
"If you use 2,000 gallons of water or less every month, then you would pay the base water rate and base sewer rate combined," Jackson said.
The average residential connection uses 8,000 gallons per month, said city manager Jay Stokes. Whereas residents once paid $59.52 for the average 8,000 gallon per month usage for both sewer and water, they will now pay $69.88 (($3.96 x 6) + 10.25)) + ((4.27 x 6) + 10.25)) per connection.
Business use is hard to pinpoint because they have varying number of connections, plus some may use more water than sewer, Stokes said. "All of the expenses are uncontrollable expenses," Stokes said. "That's the basis behind the rates going up."
The base rate has paid for most of the fixed costs over the last 19 years, Jackson said. During that time, the consumer price index for the Houston area went up 57 percent. Chemical costs to treat the water have also risen substantially.
"There is some catching up on fixed cost, but catching up is not the goal. We purchase our surface water through the Coastal Water Authority, which is a City of Houston-owned operation. The City of Houston raised its water rate 30 percent," he said.
Limited options
Deer Park receives its surface water and it is piped to a treatment plant in Deer Park, turns it into drinking water and sends it to homes and businesses.
"We really didn't really have an option after Houston raised its rates. We don't have another source of surface water, so we are limited to what our sources for water are," Jackson said.
The city does have access to well water, but is mandated by the state to use 90 percent of its water usage from surface water. The mandate comes from subsidence in communities on the Texas coast. Jackson said the city keeps its well, also known as ground, water operations functional in case of emergencies.
Also, the city must dispose of the filtered solids collected from incoming drinking water as it is treated. The solids are collected, filtered out and become sludge. The city had not done so in several years. To dispose of the sludge, which is not considered hazardous waste, will cost in excess of $300,000.
"We could haul it off to a landfill or land-apply it, but the transportation costs are enormous. It would be more than just disposing of it," Jackson said.
Stokes said the cost of alternatives to disposing of the sludge through the sewer system ventured into seven-figure range. "It's already a big-ticket item that could have been bigger," he said.
Major projects
Stokes said the city entered into a voluntary agreement with the Texas Commission on Environmental Quality for sanitary sewer overflows. "Voluntary meaning, if we had not done it, they would have made us enter into an involuntary agreement," Stokes said.
In heavy rains, our sewer system has a lot of inflow and infiltration. Under the TCEQ agreement, the city must control the inflow and infiltration by fixing old sewer lines, which will be a multi-year, multi-million dollar process. This starts the next fiscal year and should be completed during the 2016-17 fiscal year. The first area, known as "Priority Area 1b" will be the Boston, Cedar, Dutch and Elm streets area on the north side of the city. The cost estimate is $439,000.
| Fiscal year | Area | Cost estimate |
|---|---|---|
| 2010-11 | Boston, Cedar, Dutch, Elm streets | $439,000 |
| 2011-12 | South Pasadena Plaza | $1.383M |
| 2012-13 | Spencer View | $477,00 |
| 2013-14 | College Park & Heritage | $2.306M |
| 2014-15 | Deer Park Terrace | $412,000 |
| 2015-16 | South Plant Force Main Replacement | $1.4M |
| 2016-17 | Shell City & Deer Park Gardens Sec. 2 | $642,000 |
Every fiscal year, the city plans to complete an area of town.
The city and its businesses and residents will also need to address similar problems with private sewer lines that connect to the city lines.
"On the sewer mains, the city will take care of any tap issues dealing with private line connections," Jackson said. "The private lines, in many cases, have the same cases the public mains have. We will have a process to require private owners to fix their own lines."
Jackson said the city is constitutionally unable to get past the public easement onto private property to fix the sewer line without filing a lien on the property and giving the owner a maximum of five years to repay the city.
"That's not a good situation," he said.
Picking up the tab
The state has also mandated the city place more control on its storm water run-off. To that end, the city has hired a person to oversee that aspect of drainage. Her salary and expenses have been paid through the general fund.
"Under the new budget, her operations will be paid through its own enterprise fund similar to, but not the water fund," Stokes said. "We will charge residents $1 per month and businesses $1.50 a month through their water bills for storm water operations."
Stokes said the charge is not part of the water bill, but is the most logical resource to collect the fee.
Other municipalities have also been forced to budget for similar personnel and operations. Jackson said the fees will go to the storm water utility fund and it is to comply with the unfunded mandate called the National Pollutant Discharge Elimination System.
The cost for the system is $140,000, part of which will go to another rate study for businesses. This study will determine the amount of impervious surface at businesses. Impervious surfaces include parking lots and other non-porous surfaces that cause storm water to run off faster. Jackson said the fee would be implemented in October or November.
While residents and businesses have enjoyed the lower costs of living and operating for decades, the city is now forced to pick up the tab on federal and state mandates. Those costs become reflected in the fees such as the raised water and sewer rates.
"It's a difficult process because they are unfounded mandates. It's not like we can say 'No, we are not going to do those," Jackson said. "They must be done. Still the residents don't pay a residential garbage fee, so there are still fees that we don't charge. We provide free trash bags."
In the face of a daunting economy, Stokes said the city would continue serving the citizens without cutting services.
"The city has always raised the revenue it has needed to provide the services the citizens demand. We will continue to provide the same level of service to our citizens that we have always provided. With the unfunded mandates, our costs have increased and we have to ask our citizens to share in paying for the costs," he said.
Stokes and Jackson said the city manager's office is a good place to start for any questions residents may have. They can be reached at 281-476-7246.