SAN BENITO — Some of the Rio Grande Valley’s highest water rates might be climbing again.
Earlier this week, San Benito city commissioners agreed to hire a consulting firm to conduct the city’s first water rate study in more than 10 years to determine whether to boost rates to help fund operations.
During a meeting, commissioners gave the go-ahead to pay $33,000 to hire Frisco-based CAPEX Consulting Group to conduct the study to run from June 1 to Aug. 7.
Late last year, Don Gonzalez, the city’s financial advisor with Estrada Hinojosa & Company in San Antonio, recommended officials consider a water rate hike to help fund a $9 million bond issue largely aimed at overhauling the city’s 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.
During Tuesday’s meeting, Commissioner Pete Galvan questioned the study’s purpose.
“What is the exact goal?” he asked. “What are we trying to accomplish with the water rate study?”
In response, City Manager Manuel De La Rosa said the study would determine whether officials should consider boosting rates to help fund such expenses as water and sewer maintenance costs.
City held off on proposed 1-2 cent increase
In 2010, CAPEX conducted the city’s last water rate study, recommending officials boost rates an additional 1 to 2 cents.
But officials held off on hiking rates, De La Rosa said. “Just because we didn’t increase doesn’t mean it was the wrong action,” he told commissioners. “But it was recommended but you didn’t build up enough reserves to keep up with your maintenance and that’s part of the issue we’ve had.”
Now, the new study might recommend boosting rates higher than 2 cents.
“It may be less, it may be more,” De La Rosa told commissioners. “I don’t know until we get the report.”
Study to help set long-term financial plan
As part of the rate study, CAPEX is expected to present officials with a longterm financial plan.
“You need to have a better understanding of what your future obligations are going to be,” De La Rosa told commissioners.
“Collecting enough in water and sewer rates … it has to sustain itself,” he said. “You are sustaining with water rates but you’re not keeping up with the house — your home. You’re not making the necessary repairs. You keep delaying — your old phrase, mayor, kicking the can down the road.”
Background
For years, residents here have complained some of the Valley’s highest water rates eat deeply into their pockets.
In 2010, CAPEX recommended officials boost customers’ water rates from 1 to 3 percent to offset a $1.6 million shortfall in the utility department while helping to pay off the $17 million water plant that opened about a year before.
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.
During last summer’s budget workshops, De La Rosa told commissioners he planned to call for a water rate study during this fiscal year.
At the time, he discussed boosting water rates to offset a water production fund shortfall of $880,022.
