City Holds Off Hiking Water Rates on Low Use Customers

SAN ANGELO, TX — Many of the low water use customers aren’t “real” families conserving water. The residential hook-ups using less than 1,000 gallons per month, that qualify for an approximate $3 water bill discount, are empty houses that still have the water meter connected. Examples of these kinds of situations, as presented by City Water Utilities Director Allison Strube at Tuesday’s San Angelo City Council meeting, are homebuilders’ vacant homes, owners of real estate that is for sale, or unoccupied vacation homes at Lake Nasworthy.

The engineer for the water department, Lance Overstreet, explained that the average person uses 3,000 gallons of water per month. The program the City water department wants to do away with offers a 10 percent discount to water customers who use 3,000 gallons or less of water per month. There’s a difference between conservation and “just not using water,” Overstreet said.

That the incentive doesn’t produce its intended behavior is what the staff and council collectively decided before sending the proposal back to staff to be reworked with a larger picture for the future needs of water.

Eliminating the conservation discount, a benefit to low use water customers since it was enacted in 2006, will net City water over $400,000 in additional revenue per year. That is money, Mayor Brenda Gunter said, was needed for providing plentiful water into the future.

The conservation discount could be eliminated and other conservation programs financed with the proceeds. For example, Strube gave examples of offering credits for replacing toilets with low water use toilets, offering credits for xeriscaping, and rainwater harvesting. She had no concrete proposals of with what City water would replace the discount.

Mayor Brenda Gunter asked about the history of the discount. It was enacted in 2006. At that time, Strube said, the council was told the program would cost around $150,000 per year.

Gunter acknowledged that the program is on track to cost the City more than $400,000 in 2018 and not producing its intended behavioral changes to conserve more water.

Councilwoman Lucy Gonzalez asked how many customers eliminating the discount impact. Strube said 9,000, with about 25 percent of those customers at each of the four tiers of low water use at 3,000 gallons per month or less.

Councilwoman Billie DeWitt said eliminating the discount now, with no firm program to replace it, “sends an unclear message to the citizens.”

“Why can’t we leave the current system where it is until we get a more robust system?” Dewitt asked Strube. “There is a perception that you are taking something away from me.”

Harry Thomas noted that many of his constituents are living on a fixed income and any move to increase their water rates without addressing their needs should not be done.

Staff desired for the incentive to be taken away for a future benefit to be proposed and voted upon by council.

Gunter requested a more comprehensive view of City water. She mentioned several times a $120 million future liability City water will have, but did not elaborate. At the State of the City address, Gunter said the City will soon need to find a way to finance a new water treatment plant. The facility in place now was built nearly 100 years ago in the 1920s.

Council was reminded that the revenue to the City water utilities enterprise fund has been robust since the 2016 rate hikes. Eliminating the conservation credit will net City water another $400,000 annually.

According to the 2018 City of San Angelo Budget, page 230, total revenue to the Water Fund increased from $3.8 million in 2016 to a budgeted amount of $4.2 million in FY 2018.

The proposal to eliminate the conservation discount will effectively double the net income to the City Water Utilities Administration.

With so many unanswered questions, and concern about fixed income water customers, the agenda item to eliminate the discount was tabled.