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.
On November 18, 2021, the City and the Hamilton Creek Ranchettes attended mediation in an effort to settle the appeal and avoid costly litigation. As a result, an agreement was finalized with the following terms: Outside City water rates will be 10% higher than the inside water rate for 2022, 15% higher in 2023, 20% higher in 2024 and 35% higher in 2025. The terms of the agreement will only apply to outside residential water customers and will be in effect January 1, 2022 through December 31, 2025. The impact to the annual budget is minimal
Background:
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.
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. 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. 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 more information, please contact Jeff Lazenby, Director of Finance.
