Del Rio City Council members said last week they want city administrators to find a company to study the city’s water rates with an eye on whether those rates could be reduced in the year ahead.
During its regular meeting held April 28, the city council considered a resolution authorizing City Manager Matt Wojnowski to advertise for requests for proposals for conducting a water/wastewater/gas rate study.
Councilman Jim DeReus made a motion to approve the resolution, and Councilwoman Liz Elizalde De Calderon gave the second.
When Mayor Bruno “Ralphy” Lozano asked if there were any questions or concerns, Councilwoman Diana Bejarano Salgado said, “My feelings have not changed from the last meeting. Right now our citizens are going through a lot. A lot of people are hurting, not only for money, but in a lot of other ways, and to bring this on right now; it’s additional money that can wait to be done, and as far as increasing rates, I will not be in favor of any type of increase, at this time.
“I know that what we should be concentrating on (is) seeing other areas where we can cut expenses for the time being and looking for other ways to save money, because as it is, some of you folks will recall, that (the last time) we increased the rates, a lot of people stopped watering, and a lot of the lawns got very brown, and another increase, whether it be water rates or whatever, is going to hurt a lot of people and this place may end up looking like we’re out of the wild west, with nothing but dirt,” Salgado added.
After Salgado finished her comments, Councilman Rowland Garza said the city had done a water and wastewater rate study several years ago and asked City Manager Matt Wojnowksi how the scope of the current rate study being requested would be different.
“One of the issues that we continue to bring up is the sprinkler system, where there’s a higher rate (for those systems), and I know this council, for the last two years, has spent countless hours on crafting a budget and developing rates that are going to help us pay for infrastructure and the differences as it relates to the fact that we transfer a good chunk of money from the water fund and the gas fund to subsidize the general fund,” Garza said.
“I think we really need to hone in on this particular study, and we need to find a means to relax these rates and look at a way to focus on making up the money in other areas. That way we’re not have to transfer money out,” he added.
Garza said he would like to proceed with the rate study, following those principles.
“These are sustaining enterprises. They do make the city money, and the general fund relies on them for things like police and fire, parks and things of that nature. We’ve got to get to a point eventually, where we’re not relying so much on these enterprises to fund the general fund, stealing from Paul to pay Peter, and not addressing the real issue. If we have shortfalls in the general fund, the general fund needs to make them up. That’s the concern here, and I share Councilwoman Salgado’s concerns. I don’t want to see a rate increase. As a matter of fact, if there can be some sort of reduction, and the means to look at transferring less out of those funds to give some relief to the citizens in our community that use water,” Garza said.
The city manager said he agreed.
“I don’t think our water rates should be based on some comparison to any other community. The water and other utility rates should be based on the things that make up the service that is provided, and as we’re spoken before, for any utility that includes the operational maintenance cost. It includes the capital improvements and the debt service that goes along with it. It includes any transfers to the general fund. Is that too high or too low? Are we transferring what is actually needed for that utility or too much? And lastly, any reserves,” Wojnowski replied.
“As you mentioned, the council is highly interested and has requested, that we look at the rates specifically for sprinklers and also for seniors over 65. In this rate study, I would have them look at those, primarily, and there are two other areas where we’re often debating or discussing, and that is out-of-city limits rates and commercial rates, so I would definitely task this rate study to look at those four specific areas and then, as I mentioned, what the cost of service is for each of those utilities,” the city manager added.
He reminded the council the city’s last complete utility rate study was completed in 2014, and in his opinion, it was a “best practice” for all municipalities to do a rate study every three to five years “to ensure that the costs of service is aligned with the expenses that make up that particular utility.”
“In addition, we do receive Texas Water Development Board funding and it is a best practice or recommendation from them, I believe, to also have a rate study to concur that your cost of service aligns with the expenses,” Wojnowski said.
He added the rate study would be “a great tool” for administrators and the council to use during upcoming discussions of next year’s city budget. “A study does not necessarily mean that rates are going to be increased or lowered. That’s a council decision. The rate study gives us the tools and the data that’s involved in the costs of those utilities,” Wojnowski said.
Councilman Raul C. Ojeda said he had a concern about the sprinkler system rates.
He said it was his understanding that different rates existed to be put in place during times of drought and conservation, adding he believed those rates should exist for those types of situations.
“The way I see it, yards are kinds of a luxury item, and it costs a little more. . . It’s nice to have a beautiful yard, but it’s also kind of a luxury item,” Ojeda said.
Garza replied the city has ordinances on the books to trigger water conservation efforts if they are needed.
Salgado said the people hit hardest by the higher sprinkler rates are the homeowners.
“Because you have one rate for your house, and then you have a sprinkler rate that is comparable to a business rate. The business people, they turn around, and they write off what they pay for their water bills, their utility bills and all their other expenses, but the homeowner doesn’t get to write off any of that.
“I have argued all through my four years on the council, the folks that live outside the city, for years, were supplemented and at the time we voted to increase their rates to a little more than what those in the city were paying because we were supplementing their water rates to the tune of $150,000. Even though the increase did not cover all of that, my question to Mr. Wojnowski is, can you guess, as to what amount, if any, we’re still subsidizing those that live outside the city limits because if anything they should have a considerably higher rate than those inside the city, especially the businesses,” she said.
“I don’t think that it’s fair, that those folks inside the city who pay a high rate for their sprinklers and also pay their household water, to supplement those outside the city limits,” Salgado added.
“This is exactly what the rate study could look into, to make sure each different portion is paying their fair share, and a rate study could help us understand and determine what that should be,” Wojnowski said.
DeReus said he has been “pushing for this rate study” because of the utility funds’ transfers to the general fund each year.
“They’re (the transfers) are high enough where they’re then driving the water rates higher, and so if we get that number taken care of, we might be able to end up lowering the rates as we’ve been talking about,” DeReus said.
“The other part, for the sprinklers, is we need to make sure they include the cemeteries, and we probably need to look back a couple of years, because with the specifically metered and rated cemetery sprinklers, a lot of the cemeteries in town really haven’t been watering the past couple of years. They’ve been doing the bare minimum because it’s been costing them so much, so we might need to look back a couple of years to see what a good historical average is,” DeReus added.
The council then voted unanimously to approve the resolution.