SAN BENITO — Homes and businesses here might be facing a water rate hike that officials say has been put off for years.
Earlier this week, city commissioners took no action after meeting in closed session with City Attorney Mark Sossi to review a recommended “modest” increase in one of the Rio Grande Valley’s highest water rates.
Last year, commissioners hired CAPEX Consulting Group for $33,000 to conduct a water rate study that’s recommending what Frisco-based consultant Jeff Snowden described as a “modest” hike carried out over a five-year period.
At City Hall, officials are considering raising the water and sewer rate to cover annual utility system shortfalls as high as $800,000 while facing steep long-term debt payments.
“We’re still looking at the rates to figure out what … we’re going to do,” Mayor Rick Guerra said Wednesday. “We need to get something done. I don’t want to kick the can around no more. If it gets through, what amount is it going to be? You think the people are going to be happy — $1, $2, $3? Whatever the outcome, it’s not going to make people happy.”
Aiming for ‘self-sustaining’ utility system
Commissioner Rene Garcia said officials are reviewing plans aimed at offsetting annual shortfalls to make the utility system pay for itself.
“We need to find a way to make it self-sustaining,” he said. “I’m talking about revenues, expenditures and you still have money to take care of capital improvements that may arise. We’ve got to make sure we’ll be OK for years to come.”
Officials are also trying to cover the city’s long-term debt payments.
“We’re not meeting our debt,” Garcia said. “We have to come up with a plan that’s going to cover the debt.”
Meanwhile, Commissioner Pete Galvan said he’s considering calling for an audit of the city’s water meters to determine whether they’re properly billing customers while also mulling training the department’s meter readers.
“Are the meters working properly and are they being billed properly?” he’s asking.
Warning calls
For about three years, City Manager Manuel De La Rosa has been warning commissioners they’re facing a water rate hike.
In mid 2020, he proposed calling for a water rate study while discussing boosting water rates after warning the water production fund had run an $800,000 shortfall.
Later that year, Don Gonzalez, the city’s financial advisor with Estrada Hinojosa and Company in San Antonio, recommended officials consider a water rate hike to help pay off debt stemming from a $9 million bond issue largely aimed at overhauling the sewer system to comply with a 2012 Texas Commission on Environmental Quality order requiring the city to meet a March 2023 deadline or face severe fines and corrective action.
Tough decision
On the board, commissioners are torn over the prospect of boosting water rates in one of Texas’ poorest towns amid the coronavirus pandemic that’s led to soaring consumer prices.
“On the commission, some are for it, some are against because people are hurting,” Guerra said. “I know this pandemic is not the time. There are still people hurting. We’re going to look at every single thing that there is. It’s not an easy fix. The longer we let it go, the more it would hurt the people.”
Many of the problems leading to the city’s utility system shortfalls apparently stem from previous administrations’ failures, officials said.
“The situation we’re in today isn’t something that happened overnight,” Garcia said. “This has been something that has not been properly addressed. I don’t feel we can continue passing the buck to someone else. We can’t continue to ignore it or it will get bigger. I believe the commission needs to make a decision that will not burden the residents.”
The city’s last water rate hike came in 2009, Galvan said.
Then in 2010, a previous administration apparently failed to carry out Snowden’s recommendation calling on officials to steadily increase the water rate during a five-year period through 2014, he said.
At the time, Snowden was recommending a hike that would boost customers’ utility bills by 1- to 3-percent to offset a $1.6 million shortfall in the utility department.
“Previous commissions put it off so it’s fallen on our lap,” Galvan said. “We have to make a decision. It has to be fair, equitable and sustainable.”
Background
From 2004 to 2009, the city steadily increased its water rates to help pay a $32 million debt that stemmed from construction of a $17.7 million water plant opened in 2009, a $13 million sewer plant, a $1.6 million water tower and other water and sewer improvements.
During that time, previous administrations took on the projects after decades of neglect that left the city with archaic water and sewer plants.
Now, San Benito’s base residential water rate stands at $20.59 for up to 2,000 gallons for homes with 5/8 inch meters while its sewer rate is $29.09 for up to 2,000 gallons.
