San Marcos Mercury | Local News from San Marcos and Hays County, Texas

August 5th, 2011
San Marcos council members ponder utility rate increases

Jim Nuse 8-4-11 480x360

San Marcos City Manager Jim Nuse during an Aug. 4 budget workshop. Nuse's proposed city budget would raise water, wastewater and drainage fees. PHOTO by SEAN BATURA


San Marcos residents may face increased water, wastewater, and drainage fees beginning in October.

Under the city’s proposed fiscal year 2012 budget, the average residential customer could expect a $4.21 increase for the three city-provided utility services — $1.94 more for water service; $1.15 more for wastewater; and $1.12 more for drainage.

City staff recommend six percent increases in the water rate and 3.5 percent increases in the wastewater rate for the next two budget years. Staff anticipate a $1.2 million shortfall in the water/wastewater utility fund next fiscal year.

City staff recommend a 20 percent drainage rate increase over the next two years, and they anticipate a $400,000 shortfall in the drainage utility fund next budget year.

During a budget workshop on Thursday, city staff said the rate increases are necessary to keep the water/wastewater and drainage utilities self-sustaining, and to prepare for future population growth. City Manager Jim Nuse said the city has the infrastructure to serve 90,000 to 100,000 water/wastewater customers. The 2010 U.S. Census put the city’s population at 44,894. Hays County had the highest growth of any local county, with a 60.99 percent jump to 157,107 in the last 10 years.

A recent city rate study that examined 14 water/wastewater utilities found residential customers of the City of San Marcos water/wastewater utility had the fourth-highest water/wastewater bills.

City staff said it will be necessary to use $1.4 million from the city’s general fund over the next two years to restore the water/wastewater fund to the optimum level, lest credit rating agencies downgrade the city and make future loans more expensive. Staff said the water/wastewater utility will have a negative fund balance of about $12 million by 2017 unless it receives more funding.

City staff said the drainage utility will have a negative fund balance of between $4.5 and $5 million in 2013 unless it receives more funding.

San Marcos City Council Place 4 member Chris Jones sparred with Nuse at length on the matter of water/wastewater utility funding. Jones said the proposed $700,000 in the next two years for the utility should be taken from the utility itself rather than from the general fund.

“I don’t feel we have to sacrifice our future water supply to keep our rates reasonable and low,” Jones said. “what I’m saying is, pull back and look at our operations costs…the citizens are not happy about us raising rates.”

Nuse said he sees no way to cut the water/wastewater utility budget by $1.4 million in the next two years. Nuse said the only way the utility has been able to lose money for four years is the city’s “sound” savings account.

“If you tell me to cut (the water/wastewater utility’s budget), I will get it done, but I will tell you it will not be sustainable, and I will tell you, long term, it would be a poor move for this utility,” Nuse said. “The utility needs to stand on its own two feet. And we can’t start taking the legs out of it if we want it to stand on its own two feet.”

City staff proposed incremental yearly increases in water/wastewater rates beginning in 2008, said San Marcos City Council Place 1 member Kim Porterfield during Thursday’s budget workshop. No council member or staff member disputed her statement.

“Part of the reason we’re playing this catch-up is this council did not listen to the recommendations of staff for the last four years and did not raise the rates incrementally,” Porterfield said. “So I don’t want to sacrifice our future water supply (due to) past errors, or past decisions that were made by council members before us.”

About 75 percent of water served by the city is surface water, which is significantly more expensive than groundwater.

City of San Marcos Director of Public Services Tom Taggart said the city probably could not acquire additional groundwater rights due to the regulatory and market climate.

“There’s no one out there willing to sell (groundwater water rights),” Taggart said.

Taggart said the city could legally pump more groundwater with existing permits, though he said there is no reason to use less surface water due to the nature of the city’s contract with the Guadalupe-Blanco River Authority (GBRA).

“I have to pay for that (surface) water whether it’s actually utilized or not,” Taggart said.

Taggart said the city would have depleted its water supply by now if it had not begun using surface water.

“San Marcos residents invested more than $25 million 15 years ago to help build a 20-mile pipeline from the Guadalupe River, to pay for surface water rights and to build a surface water treatment plant,” said Nuse in July. “We have reduced our reliance on the Edwards Aquifer by 75-80 percent, a significant contribution in protecting the aquifer as well as spring flow into the San Marcos River.”

San Marcos voters approved the surface water project in 1990, began paying for surface water in 1995, built a 20-mile pipeline in conjunction with the GBRA in the late 1990s, and constructed the surface water treatment plant that opened in 2000.

Taggart said the costs for wastewater treatment are high in San Marcos due to the environmentally-sensitive nature of the San Marcos River, into which the city discharges treated wastewater.

“The bottom line is, if we put out lower-quality effluent, we would compromise the water quality in the river beyond what state and federal law allows,” Taggart said.

Taggart said the prospect of state and federal effluent standards becoming less-stringent is “nigh impossible.”

City of San Marcos Finance Director Steve Parker said the city will need approximately $40 million to gain access to water from the Carrizo-Wilcox Aquifer within three to five years. The water supply project is referred to as the Hays Caldwell Public Utility Agency (HCPUA) project. Parker said the project’s estimated total cost of $115 million would be shared among Kyle, Buda, San Marcos, and Crystal Clear Water Corporation. City staff propose $586,431 be allocated for HCPUA from the water/wastewater utility budget next fiscal year. According to the HCPUA, San Marcos is projected to undergo a water shortage beginning in 2026.

Staff anticipate additional water/wastewater rate increases once the HCPUA project gets off the ground, which may be in three to five years. Parker said city officials are trying to forestall the project as long as possible while they find other sources of funding.

San Marcos resident Lisa Spencer attended the Aug. 2 city council meeting to protest the HCPUA. She was the only resident to address the council on the matter that day. Spencer said the HCPUA project would cost “more money than this town can afford.”

“I hope you do not consider the citizens as your own personal ATM, because we are not,” Spencer said.

Email Email | Print Print


4 thoughts on “San Marcos council members ponder utility rate increases

  1. How about instead of charging us more for “growth” you charge the developers more to be able to grow here. Do to our location we are a developers wet dream and we should have them in our pocket not the other way around. We are gold selling out for copper prices. We should include regulations for NEW developments like grey water systems (said to reduce waste water by up to 50% and can help keep yards nice) and high green standard for products installed in the house that can reduce water usage (up to another 50% ) less water usage and waste water leads to increase in the number of people our facilities can maintain, then we don’t have to pay to build facilities for developers to make huge profits ….These green standards also attracts a higher educated, better community resident, rather then a commuter looking for a cheap home who doesn’t give a damn about our gem of a city. Lets shape our town as a well respected beautiful place and encourage a higher standard of responsibility from our new residents and developments, not sell out like some cheap wh@re…. ALSO, cheap homes does not = growth, it equals quick profits for developers and hush hush payouts to our elected city officials…FACT! Don’t believe me look at Buda and Kyle….two old havens that are now everywhere USA with no identity…. Quick tidbit, in order to break even in tax collection vs. services used by residents, home values need to be well over 200k …. Now how many of those do you see being built?

  2. One of the other things that Lisa Spencer said at the last meeting was that the city has planned to take out far more than $1.2 million out of the water utility fund to put into the general fund, and that if the city just left the money where it was the shortfall would vanish. This seems like a false crisis: take money out of the utility funds until they can’t afford to perform their function, then use that as an excuse to raise taxes, fees, and costs. At best this is the city taking utility money to plug in holes in the regular budget, at worst it’s a scam to raise money with false emergencies.

  3. Griffin – If what Lisa says is true (and I don’t doubt her), I think the problem is that no council person wants to be on record as having mentioned a tax increase. If our council doesn’t want to raise taxes then find cuts in other places but don’t use my water bill in a shell game. We pay outrageously for our water in this town. And the drought stages are a joke. If you want to cut usage, raise the rate during stage 2 and then even higher in stage 3 on the top residential users. Tier 1 stays the same, tier 2 goes up 25% and tier 3 goes up 50% – something like that.

Leave a Reply

Your email address will not be published. Required fields are marked *