Beginning later this month, city water customers will notice a $6 per month surcharge on their water bills as a result of recent action taken by the Board of Directors of the Liberty Hill Water Supply Corp. to try to recoup some of the costs of purchasing water from Chisholm Trail Special Utility District.
City Manager Manuel De La Rosa said that after the City obtained access to the financial records of the LHWSC last week it became apparent that the surcharge was needed to help offset a $5,000-$6,000 monthly charge to buy water from Chisholm Trail. De La Rosa said the surcharge will likely continue for some time because at that rate, the City is only recovering 50 percent of the monthly purchase.
Last month, the LHWSC Board agreed to a settlement in a lawsuit brought by the City to obtain the assets of the water system through condemnation. But before the lawsuit was settled, the City was given control over the day-to-day operations of the corporation for a monthly fee of up to $5,000.
To fund the acquisition of the LHWSC loan debt, the City will issue Certificates of Obligation in the amount of $2.5 million. In addition to paying off the water system’s loan to the USDA, some of those funds will be used to install a wastewater line to City Park on CR 200 and construct a new water well for city customers.
“The City is incurring a lot of debt (from the LHWSC), so I think by November, the Council will consider setting a water rate structure,” De La Rosa said. “I believe it will include an increase because of all of the debt we are incurring.”
De La Rosa said he is not sure yet how much of an increase customers can expect, but the increase will be built into a water rate structure that will be adopted by the City Council in the form of an ordinance. Currently, customers are billed in accordance with rate tarrifs implemented by the LHWSC Board of Directors.
He said City staff are still in the process of combing through financial records from the LHWSC to determine “if there are anomolies to be corrected.”
In the meantime, about 25 customers who had past due balances “ranging from $200 (about four months) to thousands of dollars” were notified that their service would be interrupted if payment was not made. De La Rosa described the list as customers who were the most delinquent or owed the most money.
He said the majority of the 25 had contacted the City either to pay in full or to work out a payment plan. However, 10 customers remain without water service because they have made no attempt to pay on their accounts.
De La Rosa said as the City works to organize the administrative side of the water utility department, the water supply itself is “in good shape. We are holding our own.”