Liberty Hill capital improvement needs drive utility rates
By MIKE EDDLEMAN
After having two weeks to digest the water rate study presented by Willdan Financial Services, the Liberty Hill Council is expected to consider potential rate changes at its Monday meeting.
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.
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.
But it is not only the increase in customers and consumption driving the capital need for the city’s water utility.
“One of the things when it comes to our water is fire flow,” said City Administrator Greg Boatright. “In order for us to attract hotels and even businesses that would look at a three-story building or anything above ground level, we would need to be able provide 1,500 gallons per minute for fire protection. Right now our system will only deliver 800 gallons per minute.”
The main line through downtown was installed in 1964, and Boatright said the city needs to replace the 50-year-old capacity it has now.
“It is 54 years old,” he said. “It has served its purpose. It is a six-inch line and so what we’re proposing is to put in a 12-inch line that will get us the types of pressure and flow we need for future businesses, especially along the 29 corridor.”
All over the city, lines are needing replacement due to age or limited capacity, with some new lines to compensate for growth.
“Probably 70 percent of it is going to be replacing old lines because even the line we have on 29 is an 8-inch line, so a majority of what we have in the ground won’t meet the capacity we need,” Boatright said. “We inherited a rural system back in 2012 and they were providing a rural water source and what we need is a water source for an urban city.”
To improve pressure throughout the city, another tower will also be needed.
“Right now we have around 350,000 gallons of capacity in our water towers,” Boatright said. “We probably need to build somewhere around a million-gallon water tank to help with our pressure.”
A pair of new wells are on the drawing board for the next two years, and a couple of dozen smaller projects including new hydrants, and upgrades to larger lines. The big ticket items on the $37.8 million water capital improvement plan is a drinking water reservoir in 2027-2028 at an estimated $10 million and direct reuse water treatment plant at $20 million in 2028.
“We’re looking at surface storage, like a 45 or 50-acre lake and the possibility with supplementing that with treated water and having a mix,” Boatright said. “The future demands that we use the resources we have, and those resources include treated wastewater. You have to. With the permit we have and the levels we have to treat that to, then retreating it through a plant for potable water, that water has then gone through a lot.”
A key factor in how quickly the number of water customers grows is whether a deal can eventually be reached for Liberty Hill to take over part of Georgetown’s service area where Liberty Hill already provides wastewater service.
Those negotiations are ongoing, and Boatright said a decision would be made once Georgetown’s asking price was determined and the long-term benefits and challenges for Liberty Hill are assessed.
“You look at what it would take to purchase the system, because Georgetown is going to be looking to be reimbursed for the purchase they originally made, but also for what they have spent on improvements over the last five years they have owned the system,” he said.
Beyond that initial cost is the question of where does Liberty Hill find the needed additional capacity and how does it get it here and store it.
“Where are we going to go find and get capacity that we can charge that system with because Georgetown has made it clear that while they would be willing to do a narrow window on capacity, that ultimately they would want whoever takes over that portion of the system to have their own water,” he said, adding that running a line from Lake Travis would be a hefty expense.
“At the end of the day, you have to look at how long you can have a wholesale agreement with City of Georgetown to where you can establish an alternative source for capacity, and then getting that delivered,” Boatright said. “That’s probably a four to five year window to get that done because you have to plan it, build it and fund it.”
Two thirds, or $61 million of the proposed capital projects between the pair of utilities are for wastewater improvements and expansion.
“A majority of what we will be spending is on wastewater, and wastewater is just more expensive,” Boatright said.
Currently at 4,993, the number of wastewater customers Liberty Hill services is projected to surpass 13,000 by 2028.
While the water utility projects are backloaded as far as expenses planned out over the next 10 years, on the wastewater side, it is a consistent level of expense over the decade.
First on the list is Phase 2 expansion of the south fork water treatment plant at $7.1 million, and then construction of the north fork plant in 2020-2022 for an estimated $4.2 million. A treatment plant on the west side, with land already deeded to the city as part of the Butler development and annexation plan, would follow and is expected to cost about $6.2 million.
Between new construction and plant expansions at the north fork and west projects over the next eight years, the city will add capacity to treat 2.2 million gallons per day. That doesn’t include the capacity expansion with Phase 2 and 3 expansion of the current treatment plant.
Because growth projections can fluctuate with increased development or a slow down in the economy, Willdan suggested the city revisit its rate plans every two years to stay as current as possible.
“Usually you do a utility rate study anywhere from every three to five years,” Boatright said. “With the fast growth environment the City of Liberty Hill is in, two years is what we need to do so we can meet that demand when things are speeding up or if we need to pull back. Being able to adjust like that is really paramount for us, because if we don’t do that and we overbuild and don’t have that revenue to meet those bond payments then that puts a burden on our taxpayers.”