Water rates to be cut for some

Four neighborhoods to get lower rates until court case is resolved.

Four neighborhoods that are outside Austin’s city limits but are Austin Water Utility customers have won a temporary victory in their fight against the city-owned utility’s water rates.

The neighborhoods — North Austin MUD No. 1, Northtown MUD, Wells Branch MUD and Travis Co. WCID No. 10 — filed suit last year, saying Austin Water Utility was charging them far higher rates than the actual cost of providing water service.

Those rates pay for programs that are tucked into Austin Water Utility’s budget but have little to do with making sure water flows out of faucets, such as wildland conservation and a city pools program, the neighborhoods said.

If the city changed that practice, “there would not be any need for any rate increase for any of its water customers, including residents within the city,” said Randy Wilburn, the attorney for the neighborhoods.

Judge Patribha Shenoy from the State Office of Administrative Hearings ordered the water utility Wednesday to charge the four neighborhoods their lower, 2012 rates instead of 2013 rates until the case is resolved. It will go to trial in February, Wilburn said.

In the meantime, Wednesday’s ruling could save residents of the neighborhoods as much as $30 to $50 per household per month, Wilburn said. The neighborhoods have more than 46,000 residents, he said.

AustinWater Utility spokesman Jason Hill said the utility hadn’t reviewed the judge’s order and wouldn’t comment Wednesday.

The lawsuit touches on a concern that Mayor Lee Leffingwell and other City Council members have raised recently: Is the city of Austin forcing Austin Water Utility to pay for too many programs that have nothing to do with providing water? That setup compels the utility to raise its rates, even as other city departments that might be a better fit for those programs consider lowering the property tax rate for residents who live in Austin’s city limits.

The four neighborhoods are wholesale customers who pay fixed, base rates and volume-based rates. In 2013, AustinWater Utility decreased the neighborhoods’ volumetric rates slightly, but raised their monthly base rates (which ranged from $690 to $1,320) to as much as $48,699, according to the lawsuit. Those base rates are charged to each neighborhood; the cost is then split up among all of the households in the neighborhood.