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Posted on: March 4, 2021

Hamilton Creek Ranchettes Appealing Out-of-City Water Rates

The City of Marble Falls adopted utility rates for out-of-city utility customers on November 17, 2020, following a comprehensive Water and Wastewater Rate Study and Financial Plan conducted by Willdan.   In response to the out-of-city rate implementation, the Hamilton Creek Ranchettes filed a petition with the Public Utility Commission appealing the rate increase.

Out of city water rates are an industry standard and in effect in surrounding central Texas communities including Fredericksburg, Granite Shoals, Horseshoe Bay, Johnson City and Burnet.

For many years the City of Marble Falls has charged the same rate to outside city customers as for inside city customers even though the cost to serve outside customers is higher.  In addition to the higher cost of service for these customers, the City of Marble Falls has expended approximately one million dollars in the outside city water systems in order for them to meet both Texas Commission on Environmental Quality (TCEQ) standards as well as City standards.

The City’s rate consultants prepared a comprehensive cost of service study that showed that the average cost of serving an outside customer is 61.8% greater than for inside customers.  This cost is due, in part, to the fact that inside city customers are owners of the utility system and therefore are liable for the system.  Outside city customers are not owners and bear no financial responsibility for the system.   This results in the inside city customer subsidizing the outside city customer.  The new rate structure was implemented to lessen this subsidy.  Additionally, outside customers do not pay property taxes that fund city services which support the water system.  Therefore, the higher rate offsets not only the risk of serving customers outside the city limits but also the lack of contribution to support services. 

For this reason, the City will be moving forward with the rate implementation as adopted and has designated legal representation to respond to the appeal filed by the Hamilton Creek Ranchettes and to represent the City of Marble Falls throughout the Public Utility Commission’s process.  

For more information, please contact City Hall at 830-693-3615.

 

 

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