by SEAN BATURA
In a night marked by some testy exchanges, San Marcos City Council on Tuesday gave first nod to water, wastewater and drainage utility rate increases of about $3 per month on the average residential customer.
The rate increases would take effect Oct. 1. The council is scheduled to hold a final vote on the increases at a Sept. 20 meeting. The proposed increases met a smattering of opposition marshaled by resident Lisa Spencer; four residents, including Spencer, spoke at Tuesday’s public hearing against the hikes.
Council members Chris Jones and Shane Scott cast the two dissenting votes against the water/wastewater rate increases. Jones cast the sole vote against the drainage rate increase. San Marcos City Council Place 1 member Kim Porterfield and San Marcos Mayor Daniel Guerrero led the defense of the rate increases, saying they were steps to putting the utility fund back on firm financial footing using sound budget practices.
“Since 2006, we haven’t had a (water/wastewater) increase, and the overall cost of water…has gone up 85 percent,” Guerrero said. “And in that time, we had an opportunity to increase rates at a smaller margin over a period of time.”
Guerrero said council members instead opted to deplete the water/wastewater’s reserve account by $4.5 million since 2006.
“And now where we’re at is we’re in the red,” Guerrero said.
At one point, council member Ryan Thomason was saying he sees no reason why the city can’t make $245,000 in cuts to the general fund budget necessary to facilitate a one cent per $100 property tax decrease. Guerrero interrupted to propose eliminating council compensation and cutting its travel budget by 50 percent.
“If we’re going to have a real conversation about making budget cuts, it starts at this dais,” Guerrero said but notably withdrew the motion before it could be voted on.
City staff said they recommended the water/wastewater rate increases to prevent a $778,000 shortfall in the water/wastewater budget in the next two years. Staff said the drainage rate increase is necessary to prevent a $400,000 shortfall in the drainage utility budget next year.
The tentatively-approved water/wastewater rate increases mean $1.25 more for average monthly residential customers using 2,400 gallons of water per month; $2.01 more for users of 5,000 gallons; and $3.49 more for users of 10,000 gallons. The proposed drainage rate increases amounts to $1.12 more for the average residential customer.
San Marcos Public Services Director Tom Taggart said the average single family home uses 5,700 gallons of water per month. Said resident William Barnes, “We’re talking about an across-the-board, two percent increase for pencils and pens for all departments, but we can’t find four-tenths of one percent of the city budget to cut, to avoid the rate increase?”
The city’s general fund takes about $3.6 million from the electric utility and $2.1 million from the water/wastewater utility per year in franchise fees, which are intended to reimburse the general fund for the utilities’ use of public right-of-way for poles, underground wire conduits, and pipelines, and for the use of roads and resulting roadway wear-and-tear.
City of San Marcos Finance Director Steve Parker said cutting the franchise fees could mean making unpopular cuts in the general fund, such as reductions in staff salary increases (which total $664,446), funding for local social services agencies ($445,713), and eliminating the July 4 fireworks display ($10,000) and the winter holiday Sights and Sounds event ($30,000).
“The non-civil service employees are at 2004 staffing levels, so it would be hard to make a recommendation to cut those positions,” Parker said. “We haven’t had any new parks staff, but we have five times the amount of parkland that we had before.”
Jones, who pushed hardest for a cut in the water/wastewater budget, faulted San Marcos City Manager Jim Nuse of failing to provide suggestions for cuts in the utility budgets.
“We told you, ‘We didn’t want the rate increases, give us some options,’” said Jones to Nuse. “And telling us that there’s nothing we can do other than ‘Just vote for it’ doesn’t seem like much of an option.”
During the city council meeting before last — Aug. 16 — staff informed the council of plans to increase water and wastewater rates three percent and 2.5 percent, respectively. The official minutes for that meeting do not indicate the council directed Nuse to make cuts in the water/wastewater fund. The council has been aware of the proposed water/wastewater and drainage rate increases since at least Aug. 4.
Nuse said the water/wastewater budget is as slim as he can make it without imperiling the sustainability of the utility. Jones favored making cuts by eliminating next year’s funding for the Hays Caldwell Public Utility Agency project. The $115 million project calls for the city to spend — as early as 2015 — $40 million in debt to gain access to Carrizo-Wilcox Aquifer water. City staff propose $586,431 be allocated for the project from the water/wastewater budget next fiscal year. Nuse said cutting funding to the project could jeopardize the availability of water.
On Tuesday, the council also gave first nod to no change in the property tax rate and a $149.6 million FY 2012 budget. The proposed budget is $3.53 million larger than this year’s budget, includes a total deficit of $1.12 million, and ending reserves of $45.6 million. The city’s reserves shrunk by $3.35 million this budget year and $351,609 last budget year, according to the city’s budget documents.
Council members plan to approve the budget on Sept. 20.
The proposed FY 2012 budget includes $336,446 in non-civil service pay raises and $328,000 in civil service salary increases. Parker said an upcoming rate study will determine whether the city uses all funds tentatively-budgeted for non-civil services raises. Parker said the city is “way behind” 2008 non-civil service staff salary levels.
The “special services” portion of the proposed FY 2012 budget includes $5,000 for the Veteran’s Day parade, $10,000 for the Summerfest Tourism fireworks display, $30,000 for the Sights and Sounds winter holiday event, $30,000 for miscellaneous special events and projects, $8,670 for art-related projects, $5,000 for membership in Envision Central Texas, and a $6,224 contribution to the Clean Air Force of Central Texas.
Hays County commissioners recently cut $6,500 and $15,000 out of the county’s proposed FY 2012 budget by eliminating contributions to the Clean Air Force and Envision Central Texas, respectively.Email | Print