Turner agrees with call to raise water rates in next few years.
But mayor doesn’t say if he agrees with amounts proposed in study
Mayor Sylvester Turner said Friday that he agrees with the findings of an outside engineering company that recommends major hikes in the city’s water and wastewater rates over the next several years.
Carollo Engineers Inc. released a study last month recommending the city increase its water and wastewater revenue by 39.5 percent and 60 percent, respectively, by fiscal 2026. The rate hikes would apply to residential, commercial and industrial water customers.
Turner said he generally agreed with Carollo’s findings, but he did not say whether he agreed with the specific amounts.
“I have reviewed the study and agree that a water and wastewater fee increase is warranted for several reasons,” Turner said in a statement. “The city must have a very reliable and safe water supply for its many users. That means the city must constantly upgrade its infrastructure for a more resilient and redundant system that can protect our water supply from extreme weather conditions.”
City Council would need to approve any new rate structures proposed by the Turner administration.
The mayor said rate hikes also are needed to cover the estimated $2 billion that Houston Public Works will be required to spend over the next 15 years to upgrade the city’s troubled sanitary sewer system, which city officials have committed to doing as part of a consent agreement with the Environmental Protection Agency.
The mayor said higher water rates also would allow the city to cover its utility debt service payments, mainly for revenue bonds used to fund city water operations. Carollo projected that without any rate hikes, the city utility system’s cash reserves would become fully depleted by the 2023 fiscal year and that its debt service costs would rise beyond levels allowed in its bond agreements.
The study recommends the city enact the steepest rate hikes over the next few years, with wastewater fee increases driving the majority of added bill costs for
most homes. Carollo suggests the city increase wastewater revenue by 20 percent in July, 19 percent next April and 6 percent in April 2023. It recommends increasing water revenue by 9 percent in July, 10 percent next April and another 10 percent a year after that.
That would be a steep rise from the last four years, in which the city’s residential water rates rose 12.5 percent. An additional 1.5 percent increase, based on the combined rates of inflation and population growth, automatically kicked in April 1.
If the city enacts Carollo’s recommended rate hikes, single-family homes that use 2,000 gallons in a month would see their combined water and wastewater bill increase from $27 today to $34 by April 2023, then to $41 by April 2026, according to the study.
Homes that use 4,000 gallons per month would see their water bills rise from $57 today to $76 by April 2023 and $90 by April 2026.
A 2017 report by the American Water Works Association found the affordability of Houston’s average bills ranked roughly in the middle of the nation’s 25 largest cities.
Black & Veatch Management Consulting LLC found that as of October 2018, Houston charged an average monthly water bill of $100 for residences that used 7,500 gallons, slightly above average among the 50 largest U.S. cities. Houston’s 2018 water rates were higher than those of Dallas, Fort Worth and El Paso and lower than Austin’s, the study found.
City officials have anticipated the rate hikes since EPA officials began negotiating a deal with Turner’s predecessor, Annise Parker, to require increased city spending on sanitary sewer maintenance. The culmination of those negotiations, a $2 billion consent decree recently approved by a federal judge, represents an alternative to a federal lawsuit for the city’s alleged violations of the Clean Water Act due to sewer overflows that frequently send waste spilling into local streams and bayous.
Under the agreement, the city will adopt a more aggressive schedule for cleaning and repairing its lift stations, treatment plants and 5,500 miles of sewer pipes, adding $2 billion in city expenses beyond what officials otherwise had planned to spend.
Turner has said that despite the impending rate hikes, water bills will remain “well below” 2 percent of the citywide median household income, a threshold set by the EPA to measure affordability, though experts have said the guideline obscures the burden on poor families. Houston and nearly every large city remained well under the EPA threshold, according to the 2018 Black & Veatch Management study.