College Station city staff members have recommended a water fee rate increase of 15% for the 2020 fiscal year.
Such a hike, if taken up and approved later this summer during the city budgeting process, would raise the monthly water bill by about $3.42 — to $26.22 from the current average of $22.80 — for an average single-family residence in the city.
Mary Ellen Leonard, the city’s director of fiscal services, presented to the College Station City Council on Thursday evening during the workshop portion of the meeting. Leonard told the council that in the past 11 years, the city has only increased water rates twice: a 2% rate bump in 2011 and a 6% hike in 2018.
College Station water use in recent years has gone down, according to the presentation, as rainfall totals have gone up in recent years.
“The rate increases in the water fund have not kept up with the population and the rate of growth that we’ve had in the city, whether it’s meters or whether it’s actually the population,” Leonard said Thursday.
She said that the fund projections indicate a shortfall of about $1 million, mostly in the residential revenue category, that has put “some significant” stress on the fund. Leonard said fund balance projections for this fiscal year may dip below the required 15% balance. “Without proposing a rate increase for [fiscal year 2020], we believe that the fund won’t recover,” she added.
Assistant City Manager Jeff Kersten said Friday that high rainfall totals and conservation efforts have meant lower revenues.
“In other words, we’re using less water, which isn’t necessarily a bad thing at all, and it certainly has an impact on the revenue that we have coming into that fund,” Kersten said.
“What we’re trying to do with these utility funds is make sure that we can pay for the operating costs for water operations and also capital costs for the infrastructure, whether it’s water wells, the lines that it takes to get the water into town, water towers, those sorts of things,” he said.
Kersten said that a rate increase proposal for 2020 has been forecasted for some time, but that the 15% increase is larger than was previously anticipated. He also said that a review of the city’s water and wastewater rate structures is forthcoming next year.
Place 5 Councilman John Nichols said during Thursday’s meeting that he wanted to see results of the rate study to ensure that a price increase is truly needed, and not just a reaction to high rainfall, which could return to normal levels in the future.
“I would be real hesitant to just say, yeah, go ahead and do 15 percent and then forget about it,” Nichols said. “I’d like to see us revisit this, and if our fund balances get back to where we want them to be, we need to be addressing that again.”
Place 2 Councilman Jerome Rektorik expressed a similar sentiment. “Instead of doing 15 percent in one year, I would think that we would want to look at this a lot more often to say we need a 1 percent or 2 percent, as opposed to all at one time,” he said.
The budget process will take place in the summer, and the water fund will come up again at future meetings.
“What we’re trying to do is make sure that we have the water fund in a good financial position as we continue to move in the future and have the water supply we need, while continuing to encourage conservation efforts for our customers,” Kersten said.