Water, sewer rate increases undetermined after workshop
By LYNETTE SOWELL
Angela Flores and Rocky Craley with Austin-Based utility consulting firm Rafetelis Financial Consultants were on hand Thursday evening for a workshop held by the Copperas Cove city council, where the council heard the results of a utility rate study conducted by Raftelis.
After Thursday’s presentation, it’s still yet undetermined what rate increases will be for Copperas Cove utility customers, particularly where their water and sewer volumetric costs are concerned.
No drainage fee hike recommended
If the city funds its Drainage Fund capital projects through debt service, the report recommends no increase for the current monthly drainage fee of $6. Also, the report revealed that the drainage fund’s balance is not enough to pay for city drainage projects through fiscal year 2022 if paying in for those in cash.
Solid Waste fee rate options
As far as the Solid Waste fund is concerned, there is a no recommended rate increase over the next five years—if the city funds its Solid Waste projects via debt service. Incurring debt to pay for those projects would run the city about $3.4 million over a 10-year period, Flores told the council. She offered an additional option to hold down that debt.
“You could do a 1 percent rate adjustment and then cash-fund your capital (solid waste projects) in that 10-year period, so that’s an option available to you,” Flores said.
Water, Wastewater rate increases recommended
Flores said the Water and Wastewater reports were combined, with rate increases for both needed in 2018 to recover the city’s projected costs, which include operations and maintenance, debt service, and cash-funded capital projects.
The average Copperas Cove utility customer uses 4,700 gallons of water per month, Flores said, so the report gave the example of a typical residential bill for 5,000 gallons of water consumption. Currently, a residential customer using 5,000 gallons of water would be charged $70.60 for both water and wastewater.
To meet full cost of service requirements for 2017-2018, combined water and sewer charges would have to go up 14 percent to $80.39 total, starting Oct. 1. The projected increases would raise those charges to $83.56 for water and wastewater alone by 2021.
This translates into a new monthly water base rate of $12.32 for residential customers, up from the current $11 base rate, and a volume charge of $6.35 per 1,000 gallons, up from the present $5.67 charge.
The wastewater, or sewer rate, would also go up from $11, to $11.44, with the volume charge per 1,000 gallons recommended to go to $6.35, up from $5.67 for residential customers.
As an alternative to the above increase for wastewater charges next year, Flores offered a phased-in approach to any rate hikes, with the hike only going up to $5.90 next year, followed by incremental increases over the next several years and reaching $6.52 by the year 2021.
Winter averaging and the rate “floor”
Discussion turned to the present policy instituted by the council years ago, which allows for winter averaging and the 8,000-gallon rate “floor” the utility department uses to calculate sewer charges in the summer for water consumption.
City budget director/deputy city manager Ryan Haverlah explained the winter average and 8,000-gallon rate floor to the council. Currently, the department takes the average of water consumption of a residential home between December and March. If a customer’s winter average is less than 8,000 gallons per month, the most a residential customer can be billed in the summer months for wastewater usage is for 8,000 gallons.
“It’s called the floor, because at the time it was adopted by the city council, there were two options being offered. One was a ceiling, one was a floor. That is the language that was entered into the ordinance,” Haverlah said.
City manager Andrea Gardner said that just because that’s what the council has done previously, didn’t mean the council had to use the same approach, adding that the cost to treat wastewater is going up. She said that the city already offers discounts to customers who are filling their swimming pools in the summer, that these customers need to call the Utility Department and ask for it.
Councilman George Duncan commented that winter averaging amounted to the city “subsidizing lawn watering.”
The council gave directions to factor in what would happen to the proposed per-1,000-gallon rate increases if the winter averaging as well as the 8,000-gallon floor were removed from the ordinance, before making any recommendation for rate increases to be included in next year’s budget. If the winter averaging is removed as well as the 8,000-gallon floor, that could result in a lower cost for volumetric wastewater charges—for some customers. It would also shift the responsibility for paying the cost for wastewater to the higher-volume users.
“It’s definitely something we can look at,” Flores said. “What happens to the rate structure if we were to completely remove the winter average? What is the impact on the individual customer?”
Proposed drought rates introduced
Proposed drought rates, which would increase the volumetric rates for water and sewer charges per 1,000 gallons during various stages of drought were also outlined for the council. A number of times over the past several years, the council has passed ordinances which enacted various stages of water conservation and restrictions according to the city’s drought contingency plan. These rates would come into effect whenever the council approves water restriction ordinances and also help public safety personnel enforce the restrictions by impacting customers’ wallets, encouraging water conservation.
Rate comparisons with area cities
Council members also asked to learn which area communities do or do not have winter averaging and a floor amount for wastewater charges. Gardner said it would also be helpful to know where the other cities are in terms of their own five-year rate studies.
“If they have a deficit, are they using other funds to keep that rate level?” Mayor Frank Seffrood also asked.
The report also provided water and wastewater rates based on the same 5,000 gallons for the cities of Killeen, Temple, Lampasas, Cedar Park, Harker Heights, Belton, and Round Rock, with rates as low as $46.10 for the city of Temple to as high as $85.90 for the city of Lampasas for the same services. Some cities have drainage fees like Copperas Cove, which were included, if applicable.
“(Those cities are) in the budget process where we are,” said councilman Dan Yancey. “We need to look at our neighbors and their proposed budgets, make sure we’re comparing apples to apples, as far as how they’re collecting. We’re in (Bell County Water Control District #1), like Killeen, Harker Heights, Belton. You’ve got contracts for various rates. It seems like there shouldn’t be as much disparity as there is, unless there are other factors involved.”
The council will receive the requested information at a future budget workshop.