|8/29/2014 5:08:00 PM|
Water rate increase coming for Alice residents
Increase will be in effect by Oct. 1
|An initial water rate study conducted for the City of Alice shows that in order for the City to break even in its Utility Enterprise Fund, rates would have to be raised by 30 percent.|
While neither the City Council nor city staff want to see such an increase, local residents can expect to see a rate hike likely by Oct. 1. Further review of the fund and water rates is planned so that the City Council can review rate options for water customers at various levels, both commercial and residential.
The Utility Enterprise Fund is expected to be at a $1.4 million deficit at the end of the Fiscal Year (FY) 2014 and that deficit will double if no changes are made for FY2015.
There has not been a water rate adjustment for the City of Alice since 2007.
"You have to face the truth before you face anything else," Consultant Oscar Martinez told the council while presenting his initial findings.
City Manager Jesus "Chuy" Garcia said the Utility Enterprise Fund is a losing effort.
"The utility effort should be your cash cow and make up the difference for your general fund," he said.
Mayor Larry Martinez said some hard decisions will have to be made. Those decisions don't just center around a rate increase, but also policy changes.
One policy change could be increasing the late payment penalty fee from 10 percent.
"No one wants a rate increase," he said, "but in order for us to be viable we have to make the hard decisions."
The average residential customer uses 6,000 gallons of water a month, Oscar Martinez said. Commercial customers average 26,000.
There are currently 5,600 residential customers in Alice and about 1,000 commercial accounts within the city limits.
Mayor Pro-tem Michael Esparza stressed a rate increase can't be made straight across the board.
"We will be hurting the ones who use the least," he said.
Water rate increase proposals ranged from 16 to 30 percent. The City Council will make its decision next week.
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