Copperas Cove city council to consider income-based utility discounts
By BRITTANY FHOLER
The Copperas Cove City Council continued discussions regarding the city’s utility rates for water, sewer, solid waste and drainage and making changes to the senior citizen discount offered on the utility bills during a workshop meeting held Tuesday evening.
City Manager Ryan Haverlah began the discussion by expanding on information that residents have been inquiring about regarding the utility rates and drainage fee.
The Federal Emergency Management Administration required all cities to develop a drainage plan, and then pushed the requirement to the state level. The Texas Commission on Environmental Quality (TCEQ) is what allows cities to charge a drainage fee.
The services for water, sewer, solid waste and drainage are funded by these such rates and fees, not property taxes.
“The drainage fee in particular is one of those fees that has been issued by the city council many years ago,” Haverlah said. “At the time it was presented, and the residents do remember that it was a temporary fee. It was supposed to be temporary, only 10 years at most.”
Before the temporary status ended, the city council at that time made the fee permanent, as evidenced by the current fee.
Regarding the senior citizen discount, the city council previously heard from the city attorney regarding the legality of the discount.
“The fact still remains in the end that the senior discount is not in compliance or does not comply with the Texas Constitution or Texas law with regards to giving away services without a cost which is what the discount ends up being, and treating any customer classes differently than other customer classes,” Haverlah said.
At the city council’s last workshop meeting held July 2, the council members came to a consensus to reduce the 20 percent discount to 15 percent as a way to begin phasing out the senior citizen discount.
During Tuesday’s discussion, Councilmember Jack Smith said that while he hadn’t been on the council when the first discussions with the city attorney occurred, he had looked into what the Texas Constitution says about the discount.
“It’s very clear that we’re not allowed to give a senior discount,” Smith said.
Smith referred to a 2017 Copperas Cove Leader-Press article which mentions the 1987 ordinance that put in place the discount for residents over the age of 65 whose income level is 100 percent below the federal poverty level.
Smith said he would be more in favor of allowing a discount for everybody under the poverty level rather than by age and asked if that would be possible. The city attorney said she would have to look into different case laws to determine whether that qualifies as a class.
Smith said he would like to see what the numbers would look like if the senior discount was eliminated completely.
“I think we have to do that at some point, and we can continue on down the road, and there will be discussion this next year and the year after and the year after,” Smith said.
Councilmember Jay Manning pointed out that the city council has been trying to figure out a way to comply with the law as soon as possible “without causing undue hardship on anybody.”
“I agree. I don’t want to cause anybody undue hardship,” Smith said. “I don’t know what it would do to their water bill if we just eliminated the senior discount, what that would do to the entire water system, but at the same time it’s wrong for a 20-year-old who is just starting out to pay utility bills for somebody that’s retired from three jobs.”
While the city’s fee schedule does have the requirement that seniors must be over 65 to receive the discount, there has not been an enforcement of the poverty level income previously mentioned.
The discount currently applies to the base rates and the volumetric rate up to 5,000 gallons.
Councilmember Marc Payne said he felt that eliminating the discount by five percent each year would add a burden to senior citizens.
“What that creates is an uncertainty of what the next year’s bill will be and it is hard for seniors to plan that way,” Payne said.
Payne proposed instead reducing the gallons cap, from 5,000 to 4,000 to 3,000 eventually until the discount does not apply to the volumetric rates for water and sewer.
The discount would still apply to the base rates, however.
Other council members said they were in favor of continuing with the five percent decrease in the discount each year.
The nearest city offering a program to help senior citizens is Killeen, which offers support through a donation program where customers donate to assist the residents who need help, like seniors on a limited income. Those seniors have to go through an application process, according to Haverlah.
“The original intent of the [Copperas Cove] ordinance was obviously to help people that couldn’t afford their water bill, not just give a discount because you reached 65,” Smith said.
Councilmember Fred Chavez said he supported the elimination of the discount but still wanted to provide help.
“I’m intrigued by the possibility of being able to provide some relief via a program similar to what Killeen is doing, based on economic need opposed to a person’s age,” Chavez said. “I think that would more fulfill where the original introducers of this program started, and I think councilman Smith is on the right track. We need to be in compliance, but if there is a way we can provide relief to citizens on a fixed income of a specific age - and maybe age is something we don’t even take into account, I don’t know - but I think it’s worth us looking into.”
Crunching the utility bill numbers
Council members and the city’s Budget Director Ariana Beckman looked over a spreadsheet with the different rates and impact on the city’s proposed budget.
Manning said he felt the city should look into the volumetric rate, which is currently $4.75 per 1,000 gallons and is proposed to increase to $4.99 per 1,000 gallons.
“I believe that when we go up on the base rate, it’s going to make the difference in the senior citizen’s discount removal worse, than if we held that and went up on the volumetric which I’ve said several times. I believe because of the structure of our cost, the volumetric should be lower and the base rate should be raised,” Manning said. “I don’t know how we’re going to get away from these numbers if we don’t choose to incrementally reduce the senior citizen discount, and I think we were on the right track with five percent and continuing there until we had none.”
Option A proposed would reduce the Senior Citizen discount to 15 percent, which adds $66,000 in additional revenue. Reducing the base rate from the proposed $14.70 to $14.35- which is still an increase from the current rate of $14.00- would generate an additional $10,000.
The Additional Option A had base rates for water and sewer set at $14.49 each and the volumetric rate for a resident with sprinklers at $4.99 for water and $6.04 for sewer, with a solid waste rate of $19.83.
This resulted in an approximately 11 percent change for customers using 5,000 gallons or less.
For a residential customer with no sprinkler using 4,000 gallons, their bill would go from $96.57 to $101.57. With the senior discount, a bill for a residential customer with no sprinkler using 4,000 gallons would increase from $78.46 to $87.38, or $8.92. A residential customer with a sprinkler system and a senior discount using 5,000 gallons would see their bill jump from $93.46 to $103.94, or by $9.90.
Additional Option B, suggested by Smith, featured a base rate of $25 and saw a 16.8 percent increase for customers using 4,000 gallons, while adding just $16,000.
Under this rate change, a residential customer with a senior discount using 1,000 gallons of water with no sprinkler would see their water charges jump from $53.26 to $74.45, a difference of $21.19. As a customer uses more water, their bill would end up decreasing. A residential customer with a senior discount using 10,000 gallons of water - of which the discount only applies to the first 5,000 gallons - with a sprinkler system, would see their bill go from $190.11 to $168.65, a decrease of 15.8 percent or $21.46.
“That’s the thought process is that the base rate needs to be covered,” said Yancey. “We’ve got a base rate that’s too low and a volumetric that’s too high and so you see what the effect is, but that’s the direction that it really needs to go is that base rate has got to cover those fixed costs.”
Haverlah said he would look up other cities’ base rates for comparison as well as look into something between Options A and B. Council members also asked Haverlah to look into how the city could go about implementing some type of program for hardship situations that is income based.
The council will be revisiting the water rates discussion again prior to adopting the city's 2020-2021 budget in August. Any rate changes as voted on by the council would go into effect Oct. 1.