Austin water bills going up, electric bills decreasing

Residential customers of the Austin Water utility are projected to pay $4.94 more per month in Fiscal Year 2016 than they are paying this year, but the same customers should see a decrease of $2.22 in their monthly Austin Energy bills, according to the city’s budget writers.

Either of those numbers could be wrong if Austin has a long string of very hot days or the price of natural gas suddenly increases.

There was certainly no argument from Mayor Steve Adler or City Council on Thursday about the projections for Austin Energy, which is in this position because of a projected $70 million drop in the cost of fuel.

However, Adler had some questions for Chief Financial Officer Elaine Hart about estimates for water usage and their impact on customers’ bills.

Hart said officials with the water utility had estimated earlier that the average residential customer will use about 5,700 gallons of water per month.

Austinites previously used about 7,000 gallons per month.

“This is a simple, straightforward question,” the mayor said. “Do you believe if you looked at what the typical person paid in their water bill last year … that there will be a $4.94 increase?”

Hart said she based her information on what AW Assistant Director David Anders told her on Wednesday night – that last summer he projected usage at 7,000 gallons a month, but that number has declined to around 6,000 gallons per month. The presentation to Council, however, showed the cost of water bills based on usage of 5,700 gallons per month, a little less than what the typical customer is actually using.

Adler said he was concerned because people were tweeting as they watched the Council meeting, and he thought inaccurate information was being given as a result of the presentation.

In the past, the utility has tried to give Council comparisons between the cost of the average amount of water used in one year and the cost of that same amount of water the following year. However, that number can be fairly inaccurate because it is difficult to predict usage.

Austin Water Director Greg Meszaros explained to the Austin Monitor after the meeting that residential water usage has been dropping each year. Part of that is because of conservation efforts and restrictions put in place by the utility. “It’s been going down every year for the last few years, and it’s been difficult to project exactly how fast it’s going to go down. But it’s generally been dropping faster than what we projected,” he said.

However, Meszaros added, “When we do the budget, we have to pick a number early in the year, because that’s when we’re forecasting the budget.”

The only real questions for Austin Energy involved its reserve funding. AE is proposing a transfer of $36 million to its stability reserve contingency fund. Mayor Pro Tem Kathie Tovo said she had no problem with putting money into the emergency funds, but she had questions about whether the city should be putting any money into the rate stabilization fund.

Although the emergency fund will be fully funded if Council approves the utility’s plan, the repair and replacement fund will not be even with an infusion of $9 million, Hart said.

Council Member Don Zimmerman said he was generally opposed to putting money in government reserve funds because of his belief that such funds could easily be turned into “slush funds.”

“When it comes to government’s ability to fund its needs as they come up, I don’t have a very positive view of big reserve funds,” Zimmerman said.

Hart, who was the chief financial officer for Austin Energy before becoming the CFO for the whole city, responded: “Part of the reason we have reserves for our most volatile utilities is because rating agencies look at our liquidity levels, and reserves help support liquidity levels that are required to maintain the high ratings that we have on our utilities.

“So that is also a consideration, but I do understand your point. They can get too large, and there are policy decisions about how they get used,” Hart said.

Customers of Austin Resource Recovery who use a 64-gallon trash can will see their monthly fees go up by $1.70. The department is adding 15 new positions to handle Austin’s ever-increasing population and its trash and recycling. That budget includes $100,000 for the citywide launch of an organics program, with full rollout planned to begin in 2017.

This story has been corrected.