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

September 1st, 2010
San Marcos to raise utility rates in 2011 to meet costs


The City of San Marcos Municipal Building. Photo by Andy Sevilla.

Associate Editor

Accepting city staff arguments that San Marcos no can longer postpone utility rate increases, city councilmembers grudgingly agreed last week that city residents will have to pay higher bills.

New utility rates will be factored into the Fiscal Year (FY) 2011 budget, which will go into effect on Oct. 2. Though the city council is planning to keep the property tax rate at 53.02 cents per $100 of taxable value, consumer rates for the city’s electric, water and disposal services will increase at least $3.50 per month on average between them.

The city is planning annual electric rate increases until at least 2016. With a 1.4 percent increase in the next budget, electric fund revenues are projected at $51,386,818, with expenditures estimated to come in at $51,314,445. The rate increase will amount to a jump of $1.85 on the average residential bill.

City officials said an electric fund balance of $4 million would disappear in 2014 without a rate increase. With the rate increases, the fund balance would grow to about $7 million by 2018. The last electric rate increase in San Marcos was a hike of two percent in 2006.

Assistant City Manager Collette Jamison said San Marcos “probably needed a rate increase two years ago (2008),” based on the electric fund forecast. City Finance Director Steve Parker said council decided against rate increases in 2008 because it “wasn’t a good time economically to get that passed.”

In a regional comparison of other cities and Lower Colorado River Authority (LCRA) customers, San Marcos is near the median in average electric rates, based on the present rates. San Marcos came in more expensive than Greenville, Kerrville, New Braunfels, Fredericksburg, and Austin, but less expensive than the San Antonio, Seguin, Bandera, Central Texas, Fayette, Weimar, College Station, Bluebonnet, Georgetown, San Bernard, and Pedernales water systems.

The highest percentage rate jump is set for the drainage fund, with an increase of 42 percent or $1.66 on the average residential bill for FY 2011. Rate increases are projected every fiscal year until at least 2016.

FY 2011 drainage fund revenues are projected at $1,439,732, while expenses are estimated to come in at $2,441,492.

The drainage fund forecast shows a fund balance of just less than $1 million for FY 2010. If no rate increases is adopted, the fund balance is forecast dry up by FY 2012. With the rate increases, city figures say the fund balance would stay positive through FY 2017, with revenues exceeding expenditures by FY 2013.

Compared to other cities, San Marcos drainage rates are more expensive than Schertz, but less expensive than Bryan, Austin, Denton, College Station, Georgetown, and San Antonio.

The last rate increase for drainage was in FY 2007, when the average residential bill went from $3.21 to $3.96. Drainage fund expenses amounted to $848,937 in 2007, jumping to $2,441,492 for FY 2011, an increase of 188 percent. Dept service payments are up 268 percent to $1,186,594 since 2007.

Operations expenses include mowing of right-of-ways (ROW) and drainage channels. Since the drainage fund was implemented in 1999, the city has issued $19 million in debt for projects. Nine of 30 projects originally identified have been completed or are underway, and water quality treatment has been included in the projects, but was unaccounted for in the original study.

Jamison said Texas State no longer pays into the drainage fund after several state institutions of higher learning lobbied the state legislature to relieve them of the cost.

The cost for trash and recycling pick-up also is increasing in FY 2011. City staff has yet to propose a specific rate increase, awaiting council deliberations on a plan for required multi-family recycling.

Though city staff didn’t recommend water and wastewater rate increases immediately, the council directed otherwise so as avoid steeper increases in future years. Earlier increases would lessen the planned increases of six percent in 2013, 13 percent in 2014, four percent in 2015 and eight percent in 2016.

In 2008, San Marcos residents voiced strong disapproval of proposed water and wastewater rate increases during budget discussions, prompting councilmembers to forgo increasing water costs pending a water rate study.

Water and wastewater revenues for FY 2011 are projected at $26,816,824, while expenditures are estimated to come in at $27,709,250. The Water and wastewater dund balance is at about $14 million for FY 2010.

Interim City Manager Laurie Moyer said increased rates for water are needed because of necessary improvements to the system, including upkeep of infrastructure and capital improvement projects. Moyer also said San Marcos treats its wastewater to a high degree of quality and is committed in securing water for the next 50 years because of growth,, also contributing to the proposed rate increases.

Moyer said construction of a new wastewater plant has been delayed for about 10 years, because the need is not as urgent as when discussed in 2008.

State law requires municipalities to begin design preparations for a new wastewater plant once the existing plant reaches 75 percent capacity, and it calls for beginning of construction of a new plant once the existing plant is at 90 percent capacity. Moyer said San Marcos’ wastewater plant is currently at about 50 percent capacity.

According to the Texas Municipal League (TML) and city figures, San Marcos has the highest water and wastewater rates in Texas cities with populations of 50,001 to 75,000 for 2010. The average cost for residential water in the cities surveyed by TML are $22.23 for 5,000 gallons and $37.84 for 10,000 gallons. In San Marcos, those charges are $32.33 for 5,000 gallons and $54.58 for 10,000 gallons.

San Marcos also is more expensive than the cities in the TML survey in costs for commercial water and sewer charges, while League City is the only city in the TML survey charging more for commercial sewer.

“Our water rates are what they are because we have been much more proactive in securing water into the future and because we treat our wastewater to some very high standards,” Moyer said.

The total city budget is $145.4 million, with the general fund at $41.4 million, water/wastewater fund at $28.6 million, and electric utility fund at $52.3 million.

The city council will take up the budget on first reading on Sept. 7 and is scheduled to adopt it on Sept. 21.

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35 thoughts on “San Marcos to raise utility rates in 2011 to meet costs

  1. “Texas State no longer pays into the drainage fund after several state institutions of higher learning lobbied the state legislature to relieve them of the cost…”
    I wonder at what points the expenses of having a University in a town like San Marcos outweighs the benefits…

    Every “cost-relieving cut” they (for profit/state institutions) get becomes a cost passed onto local homeowner/renter.

  2. Time for a city utilities citizens oversight board. I would like to see some examples of what has been done to cut costs in the last five years. What is the number of employees in elec/water/wastewater compared to similar sized operations. What are the salaries? It seems vague and hollow to keep falling back on “we treat our water to a higher standard”.

  3. I agree we need a Public Utilities Board here in San Marcos so citizens can weigh in on these issues. It is a large part of our annual budget, and has a direct impact on citizen’s financials.

  4. “Time for a city utilities citizens oversight board. I would like to see some examples of what has been done to cut costs in the last five years. What is the number of employees in elec/water/wastewater compared to similar sized operations. What are the salaries? It seems vague and hollow to keep falling back on ‘we treat our water to a higher standard’.”

    What an excellent idea.

    I’m with you on that, sir.

  5. “The cost for trash and recycling pick-up also is increasing in FY 2011. City staff has yet to propose a specific rate increase, awaiting council deliberations on a plan for required multi-family recycling.”

    It’s time we have the option for various sized trash and recyclying bins for reduced rates.

  6. Yes…it IS time for the option of various sized trash containers. That’s one way to offset the rate increase, not to mention the RIGHT thing to do. My trash container gets put out maybe every other week on average but yet I pay the same fees as my neighbor who has their’s stuffed beyond capacity every week. Let’s put that on the next RFP for trash services!!

  7. I may start showering in Ozarka. When there is a sale at HEB, it is about the same price as my tap. Seriously, the highest water rates in the state and we are due for an increase?! I guess we need more capacity and have to give Carma a free ride. And I am supposed to feel better because paying more now may decrease future increases — bureaucrat speak. The future increases will likely still come (they always do), and I would rather them be in the future. At the end of the day, we shouldn’t drain citizens’ fund balances to keep the City’s fund balances fat.

    I would like Ms. Moyer to be specific of what area cities do a lesser job of treating wastewater, because I don’t believe her. That is not even speaking to the past misrepresentations on trash.

  8. Earlier this year I placed the Citizens Utility Board issue on the agenda. The council agreed to create this board and we should see it created and staffed with citizens along with all other city boards this December.

  9. I’m seeing a lot of truth spoken in this thread. I think even the utility leadership would acknowledge a desire for a citizen board to give credibility to their needs & requests, and hold them accountable when the citizens feel an action is unreasonable/unnecessary.

    And the concept of size options for waste containers is excellent, though that will also need to consider the design requirements of the collection trucks and some likely resistance from the vendor–it’ll be an interesting negotiation. People should be rewarded for reducing their OVERALL waste. Recycling is great, but it is even better if you just don’t use a lot of disposable products to start with.

  10. I seem to recall the Sunset Commission making several observations and recommendations – one of which was the need for additional citizen boards for public safety departments as well as utility departments.

    On trash: If 2 neighbors agreed to share a trash pickup subscription could they effectively cut their costs in half? I know with the new recycling program that my recycling (every other week) is full but my trash (every week) is usually less than half full. The trash pickup drivers do not seem to mind a few additional bags or containers on occasion.

    On utilities: Please keep in mind that some City of San Marcos citizens DO NOT use city utilities – we use Pedernales and Crystal Clear. So, I hate to see my city tax money funding ANYTHING to do with City of San Marcos Utilities – that includes management salaries, rate studies, and the time of city council and staff.

  11. In years past utility revenues were siphoned off to the general fund. Not sure if that’s happening still. I’ll be looking for that utility board. So many questions, so much secrecy. It’s a very complicated department and the staff and P&Z just take Tom Taggart’s word that they need the money.

  12. Pay as you throw is the only way to go. When living in Austin I used the smallest and never even came close to filling it. Bob, the siphoningoff of money is a City of Austin trick it appears SM has learned

  13. Our wastewate treatment plant is of the tertiary standard, which “they” say makes it potable. ‘Twas done for the health of that river that’s born in and flows in our little town. I don’t know, from scarping the top of my head, what surrounding cities ww plant standards are, but ours was top notch when it was first built. As far as the price of water, it shouldn’t be as cheap as it is, if your familiar with some of the ludicrous ideas for bringing water to central Texas. Fact is there’s not much, that’s if we want the reasons we live here to keep flowing.

    There should be more than the 2 (5K gallons and 10K gallons) tiers and rates. How about 2k gallons a month. At my household we usually use 1,500-2,000 gallons a month while maintaining a garden. After that hard freeze last winter we had a slow pipe leak that wasn’t noticed until we got our bill. Water usage shot up to ~10K gallons. The bill itself only increased ~$40. I could use 5X the amount of water a month and only be charged $40? So all of my water conservation practices (i.e. river instead of showers, wild instead of maintained lawn, rain water collection for gardening) are for my own conscious rather than financial rewards for being less of a burden on the town, the San Marcos River, the Guadalupe River, the aquifer and soon to be someone elses aquifer? That’s fine I don’t need the money, after all it’ll only buy you a ticket to the dance with the devil, but more might conserve if financial incentives were in place.

  14. Pingback: Wednesday’s Water News: Boil Water Advisory Issued for Georgia Community « Water News Update

  15. We live on a one acre lot with a large number of trees (mostly oak, with other types sprinkled in here and there). I know during at least one of the drought months last year where we had to water quite a bit more than normal, we discovered there are at least 4 tiers, because we got into the 4th tier of water pricing. It was a shocker, to pay a good bit more for water that month than for electricity. I know some people might be shocked and disappointed that we used so much water that month, but we felt we had to in order to ensure key elements of our property survived the intense bout of high temperatures.

  16. Mr Harvey, mulch and an occasional very deep watering and those oaks and other natives would have been just fine. The only things I watered were a few new plantings, lots of things stressed, but nothing died, and I guarnatee the roots are deeper now.

  17. We have a lot of oaks that never get watered and the rest almost never get watered. The sprinklers haven’t been on once this year and I am 99% certain they weren’t on once last year, either.

  18. As a retired utility company business unit director you need to ask this basic question – is running various utility segments an area of core expertise of this city? Does a ‘city’ have the expertise to operate a water, wastewater, electric etc. utility? Does a city have the core expertise to have a major road construction/maintenance operation? Or, should a utility board summon experts from various utilties and/or consulting operations to review those business units of the city and compare the costs to contracting/outsourcing to those businesses that have the core expertise to manage and operate those functions with reduced overheads and the benefits of combined management etc. Many functions of any city should be periodically reviewed for cost savings by moving those functions to companies that focus only on a specific segement of the various city businesses such as utility operation, computer billing operations, highway/road construction/maintenance and the like just as most businesses do in managing their costs. That should be one of the major areas of focus the for ‘utility board’.

  19. What? ALL the utilities going up this year? Surely this is not an example of that neglected little orphan of an idea, “The REAL costs associated with fast growth?” Surely the very recent 40-year deal signed with LCRA should have given us SOME shelter from immediate electric rate increases? (Silly me. I thought the reason given for the eye-popping contract extension was to secure the best and most stable rates… “every year until 2016”? Well, I’ll be.

    Now about water rates. Yes, we pay more for our water than the usual, because we have been given little choice heretofore but to be the regional leaders, or be left out by the Giants who have publicly expressed no reluctance to suck us dry. MORE dry, should I say, since our problem from the start is living in an OASIS in arid South Central Texas. Yes, we treat our wastewater to the VERY highest standard, because our system is arranged to maximize both our use (access to water supplies) and our downstream effluent quality. No, the capacity of our relatively new facilities is not endless, nor are the surface water supplies we have long BOUGHT and HELD IN RESERVE–even before we were actually accessing or using any. We do more-or at least yap more at the customers–to conserve what we have, than any city I can name. Strictest drought rules, most penalties for waste, etc.–the whole 9 yards. And if/when we approach capacity, we WILL have to buy more water and treat more, in an increasingly competitive market. Might want to write this down: It may come, more quickly than we think, to just how much we really DO value our River–not in sentiment, but in $$$$. And how MUCH we are willing, or can afford, to pay for our drinking water. The Paso Rubles discussion, as one example, has thus far been successfully steered away from such real and practical concerns.

    Thus I ask once more, what ancillary costs will be thrust on us by the approval of the entire suburbs being pitched at us north and south? New pipelines? Lift stations? monitoring sites? Distribution lines? Storage facilities? Roads? Yes, I KNOW, Earl Ray, that they WILL appear in the Capital Improvements Plan “as they become needed.” But WHEN do we think they will be needed, and thus when will we have to pass Utility bonds? For how much?

    And yes, before anyone asks, a good deal of the “promotional money” that gets passed out, including to various organizations like the GSMEDC, along with the CofC contracts, is legally eligible to be spent out of utility revenues, surpluses, and specific set-asides. Including the EDC’s upcoming plea, very near on the Agenda. Might want to check the employee base among those enterprises–pound for pound more than in the Utilities Offices.

    Then someone has to bring up the Drainage Utility, which is just now under the shadow of having to meet national minimum quality standards for storm water runoff (cities of 50K+ pop.). We have never fallen under this mandate before now, though we have made some smart moves in anticipation of the day, to lessen the shock. Who will pay for design, infrastructure, capacity and compliance costs as our wonderful “windfall” developments come on line? (Oops! May not be time to mention that, just yet.)

  20. I must apologize for a rare omission. I forgot to remind those who would, either openly or secretly, be willing to sell out the River to sell a house, of the never-mentioned, seldom-mentioned little “problem” lurking just 300 meters from the Main San Marcos Springs: the “saline wedge,” or “bad water line.” Every indication is that, in the event of another prolonged drought or a serious Edwards Aquifer drawdown, perhaps from over-pumpage here or beyond, which would drop the hydrostatic pressure at the Springs below some near, but indeterminate level, there would be a “saline water incursion” into the Springs area, and possibly into water wells surrounding our City.

    If you like hydrogen sulfide, the smell of rotten eggs, and water so brackish it will curl your toes and your plant life and your water-borne species, then you will ADORE the idea of our River becoming, at best, another man-made, artificially pumped ditch like the San Antonio River. Worse scenario, a salt marsh. Worse still, a small wet-weather creek. Worst of all, a nice walk for artifact-hunting. If you are all about the $$$$, that kind of future is easy to reach, and not all that far out from here, unless the Feds intervene. Which they stand charged to do by a Federal District Court. Which ruling has been to the Supremes for testing already.

    And since when is a “certified geologist” the same as an “Edwards Aquifer Expert?” That’s him who is advising Carma–the former, according to the Spokesman. Not the latter, who have been oddly quiet until now.

  21. And another thing…. I commend the cities efforts to place bike racks around town, but could they please consult folks who actually really ride bikes. They replaced a real bike rack, which would have been in this picture, with some red sculpture of a bike “rack”, which is in this picture. The prior rack could actually accomodate a few bikes, where as this one might accomodate two but seems to me to be more of an homage to the days when people road bikes. They also switched out the one in front of city hall, which I’ve seen completely full of bikes in the past. And then they put a couple of these “red racers” in a few city parks in the most noticeable, yet impractical locations. Old city park bridge parking lot would be an example. Somebody is benefitiing from the purchase of these red racks, but it ain’t the biking community.

  22. Took me a while to realize those were bike racks. How much did that cost? Maybe they should stencil on the side “Lock Your Bike Here”. Will the red paint eventually rub off and need maintenance?

  23. Actually, they did consult with cyclists and the recommendation was for the Saris Wave 2106, heavy duty 7-bike model rack. I suspect these were selected, to attempt to get people to notice and think about riding, instead of driving.

    I have no idea what the capacity of these is, but it seems like there might have been better ways to get the message across. Still, I have to say that I appreciate the addition of bike racks in a lot of places where we had none before and I appreciate the sentiment behind the choice of these racks (assuming I am correct).

    I recently saw a parking space (for a car) re-striped, with a sign that said “Bicycle parking only,” or something like that, with NOTHING to lock the bikes to, or support them. Needless to say, the space was empty. At least we’re quite a few steps ahead of that “solution.”

  24. Sin Nombre,

    The city is having a Bike Plan Meeting on Thursday, September 8th, at the San Marcos Activity Center, room #1 at 7:00pm. This would be a great time to give some input on what bicyclists in San Marcos actually need (like functional bike racks in functional locations).

    I theorize those racks were purchased because they are built in New Braunfels and that the person(s) who choose them did so for aesthetic reasons. And while the old rack at City Hall wasn’t perfect (too close to the wall, obstructed the wheelchair ramp), it could safely secure more bikes than the new one. And replacing the (fully functional) rack in front of the Municipal Building was just plain stupid.

    Bob, I figure those cost at least $200 each, plus installation.

  25. Correction: the meeting is on Thursday, September 9th.

    And Ted, where is that “Bicycle parking only” parking space located? I haven’t come across it yet.

  26. Also, I’m not sure what the “Old City Park Bridge Parking Lot” is, but if you mean the small parking lot by the old fish hatchery, that location was identified because of Sights and Sounds, concerts in the park, Summerfest, etc. It is also at the convergence of a couple hike and bike paths.

  27. There was a recommendation to move the rack at City Hall, but not to change it. The exact wording of the recommendation was “The existing rack needs to be moved away from the wall, to allow enough room to maneuver, load and unload bicycles.”

  28. While we’re on the topic, today @ 5 p.m. @ the farmer’s market parking lot a, hopefully large, group of bicyclist will gather and ride around town for ~ an hour. Some call it a critical mass. Some call it a “bike for the right”. It’s been happening, although inconsistently, the first Thursday of every month for about eight years now. The idea is to bring awareness to our presence and hopefully show the need for bike lanes, or paths, or enforced speed limits. Please come join us.

  29. Too early. I’ll be stuck on 1604. I suspect that many cyclists who are fortunate enough to work in San Marcos will still be stuck at the office, too. I know there is no “organizer,” per se, but while the group is still relatively small, have you folks ever discussed pushing it back an hour? A lot of groups do theirs at 6:00, or even 7:00.

  30. When we started it, back in 2002 if my memory serves me right, we started at 5 at city hall with the purpose of being noticed by city staff as they drove home. Of course back then we were in college and 5 o’clock meant nothing outside of happy minutes @ showdown. Now I got one of those professional type jobs as well, but I’m going to cut out a little early. If more of the daily employed populous would join in, then I think moving it back to 6 is a good idea. Are you aware of people that seriously would join if it was moved back? If so, that can and will be easily done.

  31. Hey all –

    Sorry to derail the thread again, but since SMLN hasn’t posted the press release, I would like to remind everyone that there is a “Bicycle Plan Public Meeting” at the Activity Center in Room 1 tomorrow (Thursday, September 9th) from 7 – 9 PM.

    This will be a great opportunity for residents and cyclists to give the City all of your feedback concerning bicycling and bicycle infrastructure in San Marcos, and what you would like to see in the next version of the City’s bicycle map. If you would like to see what projects are on the radar in San Marcos bike-wise, have questions or comments on bike routes, or just want to give your feedback on the bike map, I encourage all of you to attend.

    See you there!

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