McAllen Public Utility challenges rate increases

The McAllen Public Utility filed a petition last week challenging rate increases set by the Hidalgo County Water Improvement District No. 3.

The MPU filed their petition with the Public Utility Commission of Texas on Oct. 27 in an effort to combat the rate increase from $97.67 to $113.96 per acre foot that went into effect on Sept.1.

The city’s public utility called the nearly 17% rate increase “arbitrary and unnecessary,” in a news release issued Monday.

The McAllen Public Utility purchases raw water needed for its municipal supply system from four districts: the Hidalgo County Irrigation District No.1, the Hidalgo County Irrigation District No. 2, the United Irrigation District and the HCWID 3.

While HCWID 3 is now charging the city $113.96 per acre foot, HCID 1 charges $65.89, HCID 2 charges $51.26, and United charges $59.96.

“Consistent with its long track record of holding meetings without public notice and in undisclosed locations, the unilateral rate increase was announced without allowing those affected, particularly MPU’s customers, the opportunity to ask questions or provide input,” the MPU stated in the release.

“District 3 has the shortest delivery route of all of MPU’s raw water suppliers, yet its rate is significantly higher, and in one case double, that of any other raw water supplier,” they continued. “Since 2012, District 3 has raised its water delivery rate 70.6%.”

Othal E. Brand Jr., board chairman of the water improvement district, said the rate increases were a result of additional expenses they had to take on because of a senate bill that imposed new requirements on them.

“No budget for anybody is arbitrary or unnecessary,” Brand said of the rate increases. “A lot of thought was put into it.”

The new mandates set by Senate Bill 2185, which went into effect on Sept. 1, required that the water district’s board establish an education program for their directors that reviewed the history of the water district, their statutory authority, duties and responsibilities, applicable laws, legal developments and ethics policies.

It also required that they establish a searchable online database of their expenditures.

Additionally the bill prohibited the water district from imposing “unduly burdensome” requirements for constructing pipelines upon the MPU or any public utility that proposes to construct water or sewer pipelines in the district’s service area.

The district also cannot impose fees that amount to more than the actual costs incurred by the district related to construction by the MPU or any other public utility.

“We’re the only water district in the Valley that got a new mandate and a bill passed just for them this last session, and it required additional expenses that we have and also projects that we have to accomplish,” Brand said.

He acknowledged that the rate increase was the biggest rate hike the water district has ever imposed but, nevertheless, was not concerned about the case before the state.

“This needs to get before the commission and let them lay out everything that we’ve done,” Brand said. “I don’t anticipate there being any issue once it’s in front of the commission.”

As for the allegation that the water district had held meetings without notifying the public, Brand said that was an outright lie.

“We publish all of our meetings,” Brand said. “I went back and checked to see if maybe somebody had made a mistake — there were no mistakes made.”

“We publish our notices of our meetings like I’ve done for 18 years since I’ve been here,” he reiterated. “All of them legal.”

As initially filed, S.B. 2185 would have dissolved the water improvement district entirely.

When he first filed the bill in April, Sen. Juan “Chuy” Hinojosa, D-McAllen, said the water district was a waste of taxpayer money and an unnecessary layer of government.

“The only customer they have is the city of McAllen,” Hinojosa said on Wednesday. “Why would you need a layer of government, on top of another layer, that the only income they have, or revenue, is the city of McAllen?”

“They charge the city of McAllen much higher rates than the other water districts charge,” Hinojosa added, “increasing the cost for the city of McAllen ratepayers by about close to $2 million a year.”

In response to the attempt to do away with the water district, Brand issued a statement at the time calling the bill an “illegal power grab.”

The bill essentially died in the form it was introduced so, instead, it was amended to include those mandates that Brand now credits for the rate increases.

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