Business & Economy
How Lake Houston was developed to supply Houston’s drinking water.
Editor’s note: This story originally ran Sunday, Aug. 6, 1950.
If water users decide on August 26 to invest $24 million in more water for growing, thirsty Houston, the average single householder’s share of the investment would amount to about 75 cents a month.
That figure is based on a $1.50 monthly “family” water bill, which the city water department says is the average, and the 50 per cent rate increase proposed to finance the new bonds.
Most of the new water funds — if the bonds are voted — will go for building a dam and reservoir on the San Jacinto River near Sheldon. The bond issue will be submitted to Houston property owners in conjunction with the Democratic runoff primary election August 26.
Houston’s average water bill is the lowest in Texas and among the lowest in the nation, under the present rate of 20 cents per 1,000 gallons, and would still be in the lower brackets if increased 50 per cent, a survey of cities comparable in size the Houston handed to Mayor Oscar Holcombe, showed Saturday.
There has been considerable drama and coincidence in the subject of water rates in Houston. City records show that a 50 percent increase in water rates would put the rates right where they were back in 1910 — 30 cents per 1,000 gallons.
Rate Cut in 1910
The same year, on August 1 to be exact, the City Council cut rates from 30 to 15 cents per 1,000 gallons — the first and only cut in water rates in the city’s history, according to city records.
Thirty cents went much further in those days than the same amount will go today, of course.
The city’s growth continued. There were annexations and consolidations, with expansion of the water supply keeping pace. In 1918 the Heights and Magnolia Park came into the city; in 1922, River Oaks and Harrisburg.
On January 1, 1937, water rates were increased by the City Council from 15 to 20 cents per 1000 gallons. That was the last change of water rates.
Frequent Battles
The “dramatic” thing about water rates in the city’s history stemmed from the frequent battles history records between the private utility firm that formerly furnished the city water and the city fathers. The battling came to an abrupt end when the city finally purchased the water works for $900,000 in 1906.
Value of the present water system is now estimated by Utilities Director Frank Baldwin in excess of $25 million. With the recent annexation action, there are approximately 105,000 water meters in the city: 44 water wells in production capable of pumping 110 million gallons daily, and eight more wells being drilled that will raise the total production of water to 130 million gallons daily.
Home and Industry
The proposed $10 million dam and reservoir would impound enough water to allow a “guaranteed” 150 million-gallon-a-day flow into the distribution system. Of this amount 50 million gallons daily would be purified for domestic use, and the remainder would be available for industries.
Getting back to comparison of Houston water rates with those of other cities in Texas and the nation, it was reported to the mayor that of the 24 cities surveyed, the proposed new 30-cent-per1,000-gallons rate would be less than the rates applying in 25 per cent of the cities covered in the report.
Basic Rates
The cities and their basic rates (based on the price for 1,000 gallons) are: Dallas, 37 cents; Louisville, Ky., 87 cents; Indianapolis, Ind., 33 cents; Baltimore, Md., 27 cents; Cleveland, Ohio, 22 cents; Albany, N.Y., 24 cents; Atlanta, Ga., 21 cents; Birmingham, Ala., 26 cents; Memphis, Tenn., 34 cents; Milwaukee, Wis., nine cents, Rochester, N.Y., 21 cents; Denver, Colo. 19 cents, and Portland, Ore., 15 cents.
Other cities: Minneapolis, Minn., 20 cents; Miami, Fla., 28 cents; St. Louis, Mo., 20 cents; Toledo, Ohio, 12 cents; Newark, 37 cents; Pittsburgh, Pa., 20 cents; San Francisco, Cal., 26 cents; Columbus, Ohio, 16 cents; Boston, Mass., 20 cents.
Going further into comparison of Houston’s proposed water rates with other cities in Texas, a survey compiled from 273 Texas cities and towns by the Texas League of Municipalities shows that proposed water rates here would be lower per 1,000 gallons, in all those cities and towns except Brownwood, Uvalde, New Braunfels and Fayetteville.
Commercial Rates
The report to the mayor, as concerning water rates for industries here, stated:
“It is significant that the large commercial users of water, 1 million gallons and upward a month, receive a lower rate in Houston than in almost any of the other cities contacted. Only three other cities (Milwaukee, New Orleans and Cleveland) out of 24 reported a lower rate than Houston for 1,000,000 gallons of water.”
The rate to industries here is six cents per 1000 gallons of water if 1,000,000 gallons or more is used each month. This would also be increased 50 per cent under the proposal, as would “charity” rates (applying to hospitals, schools and charity institutions) which now pay 10 cents per 1,000 gallons.
In connection with the charity rates, the report shows that 16 of the 24 cities surveys do not even offer a charity rate.
Not Tax Supported
The proposed bonds are junior lien bonds, and will not be tax supported, but will be financed entirely from revenue of the water department.
The $24 million in additional water bonds will raise the bonded debt of the water division to $36.7 million, which will require $1.75 million a year to service, according to a prospectus by municipal experts on the proposal.
With the higher rates proposed, there will be an estimated net of $2.45 million a year over and above operation and maintenance of the water division, and this money will provide 140 per cent coverage of the needed debt service, considered necessary to get an interest rate as low as 2.5 per cent.