Council holds further discussions on water rates

By LYNETTE SOWELL

Cove Leader-Press 

A Copperas Cove ordinance first approved by the Copperas Cove city council as early as 1985—the senior citizen discount for Copperas Cove residential utility customers age 65 and over—might be going away.

Last week, during water rate discussions by the Copperas Cove city council, consideration was given to eliminating the discount to offset a revenue loss to the city’s water and sewer fund. For the current fiscal year, those discounts are on track to reach a total of $372,288. In 2016, senior citizen utility bill discounts amounted to $204,000 in lost revenue, with the 2015 amount being $182,186.

Ryan Haverlah, the city’s budget director/deputy city manager, presented a document on Tuesday that shows usage consumption averages for residential and residential/senior citizen customers, both with and without sprinkler systems. 

Of the city’s current 11,022 residential utility accounts, 1,437 belong to senior citizens who receive a 20 percent discount on their utility bills. The majority of senior citizen accounts, 871, or 61 percent, use less than 4,000 gallons of water. Presently those lower-volume usage customers have an average discounted bill of $69.42. If the discount stays in place, that average bill for the same usage would increase to $71.55, which includes the proposed utility rate increases across the board.

But coupling the elimination of the senior citizen discount and raising water and sewer rates, those same customers would get a double-whammy on their bills starting October 1, with their bills rising $18.52 or nearly $20 per month to $87.94. 

Copperas Cove utility customers age 65 or over, regardless of income level, have to apply to receive the current discount. But according to a city ordinance enacted in 1987, only senior citizens at or below 100 percent of the Federal poverty level could qualify for the discount. 

“Ideal” fund balance in jeopardy

One focus during Tuesday’s discussion was the water and sewer fund’s fund balance, which is falling below the “ideal” amount this year. The city council has adopted a 90-day fund balance policy, which means each of the city’s funds must have 90 days of reserve operating funds on hand—the “ideal” fund balance. 

For fiscal year 2015-2016, the water and sewer fund balance was $3,375,883—a healthy $1,694,495 over the ideal fund balance number, which last year was $1,681,388. For 2016-2017, the water and sewer department is looking at ending the fiscal year with a $1,707,138 fund balance, $470,270 below the ideal fund balance of $2,177,408.

However, in August 2016, $3,000,000 of that water and sewer fund balance was used to finance a loan made to Endeavor Real Estate which went toward the construction of the next phase of the Five Hills Shopping Center. This action was brought to the city council and approved after the proposed loan from the city’s water and sewer fund reserves was both “reviewed and supported by” the city’s financial advisor. The loan was part of the first amendment to the 380 agreement between the city and Endeavor.

Then for the next fiscal year, 2017-2018, the city’s budget department projects a fund balance deficit of $689,558 below “ideal” for 2017-2018, even including the council’s proposed water and sewer rate hikes for base and volumetric rates. Next year’s ideal fund balance number is $2,013,786, with the city projecting a fund balance of $1,324,228. Eliminating the senior discount would make up some of that deficit 

“Giving” away water services: is it legal?

The legality of the senior discount was discussed Tuesday evening, as it was during the August 8 meeting, during which Dan Santee with the city’s law firm, read from a memo reportedly from Susan Rocha with the firm, who gave an opinion of the water discounts in 2010. 

The Leader-Press requested a copy of that correspondence. In the digital record, not signed or dated and not on letterhead, released by the city on August 14, it was stated that a business owner who was not a senior citizen, had requested a water rate discount from the city.

It also included information about the legality of giving a discount of a public utility service, citing section 1502 of the Texas Government Code that “rates charged for services provided by a utility system must be equal and uniform” and that a “municipality may not allow any free service” except under two conditions, to include municipal public schools or buildings operated by the municipality. 

However, several other Texas cities do offer discounts on utility bills to their 65-and-over customers, such as Coppell, Pasadena, Forney, Lancaster and Lake Jackson. 

The council asked to see the impact of removing the discount on the fund balance, as well as resident bills across the board.

The senior citizen discount has had several changes over the past 32 years, with the current rate providing discounts for water and wastewater base and volumetric rates, as well as the drainage fee and solid waste collection.

Vote for rate changes on September 5

The council will vote to adopt any fee changes at its September 5 meeting. The council will have another meeting on Tuesday, Augus 22, with Haverlah telling the council he would provide information on the impact to the water and sewer fundfrom water rate changes and removing the senior discount

At the August 8 council meeting, the council proposed raising the base rates for both water and sewer across the board from $11 to $11.77 per month for those with 3/4” meters. For water volumetric rates per 1,000 gallons, the council proposed going from $4.05 to $4.10 per 1,000 gallons and from $5.67 to $5.90 per 1,000 gallons for wastewate /sewer. The drainage fee and solid waste collection fees will not increase. 

The winter averaging and 8,000-gallon floor have both been removed from the proposed rate calculations for sewer costs to customers.