Water & wastewater bills going up 4.5 percent in 2010 budget

The Austin Water Utility’s is proposing a fiscal 2009-2010 budget that includes flat expenditures for day-to-day operations and a 4.5 percent system-wide rate increase to help pay for $1.4 billion in planned construction projects over the next five years, including Water Treatment Plant 4.

 

Council is scheduled to hear two water briefings on Thursday, one on the city’s conservation efforts and the other an update on WTP 4.

 

The utility budget, which includes both city water and wastewater systems, projects operating costs of $175.5 million for the fiscal year that begins Oct. 1. This is less than a 1 percent increase over the $174.2 million in operating requirements for the current fiscal year. Another major cost, debt service, will rise from $161.4 million this year to $165.3 million next year.

 

The proposed budget projects $422.8 million in total revenues, based on a 4.5 percent combined increase in water and wastewater rates, compared to $405.4 million in revenues and a 7 percent rate increase for the current budget year.

 

The proposed rate increase would include a 5.7 percent hike in water rates and a 3.3 percent increase in wastewater rates. The increase would raise the monthly utility bill of an average residential customer—who uses 8,500 gallons of water and 5,000 gallons of wastewater—less than $4, from $63.57 to $67.35, according to David Anders, the utility’s assistant director of finance and business services.  Even with the increase, Austin utility rates will be well within the bond rating agency benchmark, which stipulates that rates should be less than 2 percent of the median family income in Austin, Anders said.

 

The rate increase will help the utility pay for necessary construction projects for both the water and wastewater systems, he said.

 

“The capital improvements projects will be needed to support area growth as well as for rehabilitating existing infrastructure,” Anders said. Of the $1.4 billion total proposed for the next five years, $856.4 million would be earmarked for new projects, such as Water Treatment Plant 4, and $542.3 million would go for rehabilitation, such as replacing or repairing old or leaky pipes.

 

The five-year spending plan includes $912.7 million for water projects and $486 million for wastewater.

 

Major planned capital expenditures for water include $423 million for Water Treatment Plant 4 and associated transmission mains; $90 million for new infrastructure in a rapidly growing area along South Interstate 35; $80 million for priority water system rehabilitation; $59 million for upgrades at the Davis Water Treatment Plant; and $29 million for water reclamation projects.

 

Major planned wastewater projects include $134 million in wastewater treatment plant upgrades; $71 million for a downtown tunnel; and $45 million for South Interstate 35 infrastructure.

 

Anders presented highlights of the proposed budget to the Water and Wastewater Commission earlier this month (July 8). The water utility budget will be part of the overall city budget package that City Manager Marc Ott delivers to the City Council today. The Council is scheduled to consider the overall budget in August before taking final action in mid-September.

 

Key cost drivers for utility operations in the next fiscal year, according to Anders, include:

• $1.3 million increase in operating requirements;
• $1.3 million in increased personnel costs;
• $1.2 million increase for chemicals;
• $1 million for a leak-detection contract;
• $1 million for support of the 3-1-1 telephone system; and
• $500,000 in increased contract services, including heating, cooling and ventilation maintenance, and security.

At the same time, he said, some costs will drop, including:

• $1.7 million by moving an emergency repair contract to the capital improvement budget;
• $700,000 in lower vehicle transportation fuel costs; and
• $800,000 in lower electricity costs.

Under the proposed budget, the utility would have 1,070 full-time positions next year, a net increase of about 14. The added positions mostly would be for additional crews to work on repairing water leaks.