City Council to take another look at Liberty Hill water rates



The Liberty Hill City Council has seen a pair of presentations on proposed water rate increases, and City Administrator Greg Boatright said consideration and a vote could come as early as Monday’s meeting.

In late November 2018 – and again in January – Dan Jackson, Vice President at Willdan Financial Services discussed why rates increase, the circumstances that make Liberty Hill’s situation unique, and what local circumstances led to the need to consider a rate hike.

The overarching reason for the potential rate hike in water and wastewater rates is an estimated $98.9 million in capital improvements tentatively laid out over the next decade to expand and improve both utilities to keep up with growth.

“I think we did a really good job, and our engineers did a really good job, of getting the information to Willdan, who is helping us establish the rate,” Boatright said. “This puts it where it needs to be this year, then the plan is we will have an incremental increase over the next two years because we are growing and the need and demand on our system is continuing to increase. We have to keep up with that.”

Water rates were last increased 8 percent in January 2018 and Boatright said his prime focus now is on wastewater rates.

The recommendation from Willdan was for a two-year rate plan that would increase water rates for in-city residential users by $2.50 to $3.50 per month in 2019 and again in 2020 based on usage. Wastewater service alone for all customers would increase between $5 and $6.50 per month in 2019 and again in 2020. Customers on city water and wastewater, depending on usage, would see about an $8 to $10 combined increase per month in 2019 and $8.50 to $11 increase in 2020. Any proposed rate change is subject to approval by the City Council.

Jackson said factors beyond expansion costs, including equipment and personnel all play into determining the rates needed to maintain a self-sustaining utility.

“The cost of everything goes up two to three percent every year just due to inflation,” Jackson said. “It is natural to assume that water, which you run like a business, is going to trend upward over time. There are a lot of components to water service that are subject to cost increases that are beyond the control of the utility, things like chemicals, electricity, insurance.”

Liberty Hill’s utility pays for itself through one-time charges such as connection fees and the monthly charges for customers. Jackson said many municipalities are not running self-sustaining utilities.

An estimated 40 percent of water utilities around the country do not currently charge rates that cover all costs associated with the utility.

“We are forward-thinking in our planning to handle the growth that’s coming our way and the Council’s to be commended for recognizing that and helping staff put the options together and voting on those and helping us stay up to speed with the growth we see coming,” Boatright said.

On the water side, where Liberty Hill currently has 833 accounts, the projection is that utility will serve more than 1,900 customers by 2028. Billed water consumption today is just over 68 million gallons annually, a total expected to double in 10 years.

The City currently has 833 water customers and 4,993 wastewater customers, but there has been talk of Liberty Hill negotiating with Georgetown to take over many of the water accounts that are within the City’s wastewater service area. No agreement is in place, and Boatright said that decision would ultimately be made based on how much sense it makes for the city.

On the wastewater side, Liberty Hill has added just over 1,900 accounts since 2016 and is projected to be at over 13,000 by 2028, more than three times the current total.

Water consumption is also expected to double over the next decade. While the City currently has enough water or access to water to more than cover demand, with the ability to deliver 800,000 gallons per day – which is 2.5 times more than current usage – any dramatic change could speed up the need for securing more water.

History shows the City has been adding 100 to 125 water accounts annually in recent years, up to 833 this year from 573 in 2016. Based on that trend, total accounts is expected to exceed 1,000 in 2021 and be just shy of 2,000 by 2028.

The capital improvement plan driving projected rate increases includes $37.8 million in water system improvements and $61 million in wastewater improvements.