Austin Water Utility proposes ‘meaty’ cuts to balance FY2015 budget

A struggling Austin Water Utility moved forward with tough cuts at the latest meeting of the Joint Committee on AWU’s Financial Plan.

 

Right now, AWU has several options on the table for next year’s budget. The utility’s latest proposal has $33 million in budget cuts, with $4.5 million of that already proposed. On Wednesday night, the utility came forward with another $28.5 million in budget cuts.

 

These additional cuts could mean customers’ rates will rise 13.2 percent in 2015 instead of increases as high as 23.7 percent next year.

 

“We’re going to go through a lot of cuts tonight, but you can’t cut your way out of this totally and still have a water utility left,” said Austin Water Utility Director Greg Meszaros.

 

One of the toughest cuts proposed is an annual $500,000 that is earmarked for grant funding that helps low-income families repair their private taps. Meszaros explained that the cost of repairs can be extremely expensive, and they are often most needed in older, affordable homes owned by lower income families or people on fixed incomes.

 

“They can’t afford to repair these wastewater overflows. They can’t afford to repair these taps. So these things leak and leak and leak and we try to go in and repair them and slap a lien on their house – it’s ugly. It’s ugly business,” said Meszaros.

 

Meszaros explained that to break out of this pattern, the water utility has worked with the city’s housing department to give grants for tap fixes for those who qualify.

 

“It helps low-income people. It helps the environment. It helps the utility. It keeps wastewater out of the ground and the water. I think it’s a really creative way to help solve a really thorny problem. The EPA loves it. Everyone thinks it’s the coolest program. We’re cutting it,” said Meszaros.

 

On the chopping block are a number of the utility’s programs, including a reduction of $1.3 million of the city’s contract for hauling away bio-solids, at the risk of another compost fire. The utility is also considering eliminating a contract for sewer pipeline cleaning and television inspection. That change could save about $1.3 million in the short term, but Meszaros warned that it could mean that identifying problems in the sewers could take longer, and could mean more sewer overflows for the city.

 

In order to cut costs, the utility is also looking at reducing transfers to other departments – something Mayor Lee Leffingwell has brought up in early City Council budget talks. AWU is proposing eliminating about $5.5 million that goes towards the Sustainability Fund. That change had yet to be approved by the City Manager’s office, but was being discussed as it has been for the past two years.

 

AWU is also looking to reduce Green Choice costs by $1.5 million, which is still under discussion, as is a proposal to maintain the current amount that AWU pays to Austin Energy for billing and customer care, which would save $1.5 million next year.

 

The water utility has gotten the go-ahead to eliminate a $1.24 million transfer to the Austin Police Department and a $445,000 to the Austin Fire Department.

 

AWU is also hoping to save $4 million by moving direct labor costs to capital improvement programs. The utility started funding those positions about eight years ago, and have decided to move those direct construction costs back to CIP.

 

AWU projects that they will save about $900,000 by eliminating nine vacant positions, another $400,000 by eliminating temporary positions, and about $743,000 in personnel savings by leaving positions vacant. Meszaros warned that cost could be more than financial.

 

“The number of bodies that you are putting out in the field every day are going way down. You have to understand, we have a utility that is way bigger, and the number of bodies out there is going down…These are real, real meaty cuts here,” said Meszaros.

 

The utility also expects to have almost $16 million in additional funds – $11.7 million from Green Water Treatment Plant decommissioning reimbursement and $4 million from the sale of the Lime Creek Quarry.

 

Though the cuts are substantive, the utility is also scaling back their projected sales for the next few years. Though Austin has grown, so has its water conservation in the face of an ongoing drought. If that trend continues, the utility may have to make even harder decisions in the future.

 

“I’m telling you, the next $10 million cuts will make these look like fun little cuts,” said Meszaros.