The Lampasas City Council appears set to increase water rates for the upcoming fiscal year, although the council has not decided whether to raise electric rates.
The budget for the new fiscal year has not been adopted yet, but during a special session Monday, the council provided the city staff with direction about how much to charge for water.
The council plans to increase the base rate for water by $1.30 per month and intends to raise the consumption charge by $0.05 per 1,000 gallons.
The council has stated support for rate increases as a way to help the water/wastewater department cover its costs. Even with transfers in from other sources, the water/wastewater department spent more than it made from fiscal year 2014 to fiscal year 2017. Figures were as follows:
• 2014, transfer in of about $396,000; deficit of approximately $368,000.
• 2015, transfer in of about $496,000; deficit of approximately $494,000.
• 2016, transfer in of approximately $255,000; deficit of about $141,000.
• 2017, transfer in of about $350,000; deficit of about $227,000.
The city's most recent yearend projection for the current fiscal year is for the water/ wastewater department to have a surplus of $14,942, City Manager Finley deGraffenried said in an email Wednesday. The projected surplus, however, includes a transfer in of $100,000 to cover capital costs related to water extensions and upgrades.
"The slight surplus projection is due in part to the city not getting to all the projects we anticipated in our plan," deGraffenried wrote.
During Monday's meeting, the city manager told the City Council that even in years when water/wastewater income exceeded expenses, those surpluses were supported by revenue transfers into the department.
The potential increase in water rates is projected to boost water/wastewater revenue by about $158,000 in the upcoming fiscal year.
At Monday's meeting, the city provided statistics about how the proposed rate hikes would affect different types of customers. The statistics take into account the proposed base rate increase as well as the proposal to raise the consumption-based charge.
For a family that used about 6,000 gallons per month, the higher rates would raise the water bill a little more than $1.50 per month. For a family that used approximately 14,000 gallons per month, the water bill would go up about $2 per month.
On the commercial side, examples ranged from a machine shop to a factory. The machine shop, with an average monthly water use of about 730 gallons over the past year, would see the monthly water bill increase $1.34. The factory, which used about 200,000 gallons of water per month, would pay about $11 more each month in water bills than it does now.
Along with planning to raise water rates, the council also has stated support for a $0.50-per-month fee on utility bills to pay for a recycling program the city plans to add. The city does not intend to offer curbside pickup of recyclable items, but it plans to let people drop off recyclable items at the public works yard on Brown Street.
It will cost about $12,000 per year to run the recycling program, according to city staff estimates, and the $0.50-per-month fee charged to customers will generate an estimated $15,600 of revenue per year.
As they look to offset costs for recycling, city officials also have said there is a need to boost water/wastewater revenue to cover those costs.
Commenting about the proposed water rate increases, Mayor Misti Talbert said the city needs a way to recoup more of its water-related expenses. She noted ongoing costs for infrastructure and repairs.
“I feel like we’d be incredibly irresponsible if we do not continue to find a way to fund our water/ wastewater,” Talbert said. “With the issues and the incidents that we keep having, we’re never going to crawl out if we don’t start adjusting it now.”
If all the additional revenue from water rate increases stays in the water/ wastewater department – as the mayor insisted those monies should – the city’s overall budget would have about a $36,000 surplus in the upcoming fiscal year.
That surplus would occur if the city spends very little on capital items and does not give an across-the-board pay increase to employees.
The $36,000 surplus figure also is without any increase in electric rates. The City Council has talked about whether to charge more for electricity, but when Monday’s meeting concluded, the council had not decided on changing those rates.
Council members who expressed willingness to consider charging more for electricity talked about an increase of one-tenth of a cent per kilowatt-hour consumed. That would boost revenue by about $100,000 – which, combined with the projected $36,000 surplus, would be enough to fund about a 2 percent cost-ofliving adjustment for city employees.
A one-tenth-cent increase per kilowatt hour would increase a customer’s bill by $1 per month for every 1,000 kilowatt-hours consumed.
Based on accounts the city cited as examples, a residential customer who uses about 2,100 kwh per month would pay an extra $2.10, and a residence that uses about 6,150 kwh per month would pay an extra $6.15. A factory that used about 194,000 kwh per month would pay an additional $194 per month for electricity.
Talbert asked council members for their opinions about electric rates, employee pay and whether city officials can trim the proposed budget.
Councilman Mike White did not attend Monday’s meeting.
Councilwoman Delana Toups said because the council plans to charge more for water, it should not raise electric rates, too. The city should divide the projected $36,000 surplus evenly among all employees, she said.
Councilman Robert McCauley suggested raising the electric rate one-tenth of a penny per kilowatt-hour, adding that $100,000 of anticipated additional revenue to the projected $36,000 surplus and dividing the $136,000 by all city employees. The city has about 115 full-time employees, so each person’s raise would be about $1,200.
Mayor Pro Tem TJ Monroe said the city should not raise electric rates.
Monroe also said the city has given substantial raises over the years. As a result, she proposed no pay boosts – other than merit-based raises for “a few who deserve it.” Merit-based raises should be funded from the $36,000 surplus, Monroe said.
Councilman Chuck Williamson said not giving raises could cause morale problems and affect some employees’ job performance. He said staff members deserve some kind of pay increase, but he is not sure how much.
The councilman suggested the same thing McCauley did: an electric rate increase and pay raises of the same dollar amount for each employee.
Councilwoman Cathy Kuehne also said she would support the tenth-of-apenny electric rate increase, although she asked for departments to look for additional savings before the budget is finalized.
In contrast to other council members who spoke in favor of pay increases, Kuehne said each employee should get a 2 percent bump, rather than the same dollar amount for each person. She acknowledged a flat percentage would give higher raises – in actual dollar amounts – to higher-paid employees than to lowerpaid workers. Nevertheless, Kuehne said it is fairer to give raises based on a percentage, and she said that rewards employees who have stayed with the city for a long time.
Talbert said it will be difficult to fund raises in the upcoming year because of the city’s costs for infrastructure and other key items. Nevertheless, she stated emphatically that the council consistently supports the city’s employees. If there are no raises, the mayor said, that does not mean the council does not support the staff.
Talbert said before agreeing to an electric rate increase, she wants to be sure the city staff can trim the budget enough to fund pay raises.
DeGraffenried said the staff will look at the budget further to try to find more savings.
The City Council’s next regular meeting is set for Aug. 13 in Council Chambers at 405 S. Main St. The council typically holds a workshop session at 5:30 p.m. and begins its regular session at 7 p.m.