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Water rate hike on the table

I’m sure there will be a massive freakout over the possibility that water rates could be increased, but that won’t stop me from expressing the naive hope that we can have a rational discussion about it anyway.

The increase could be spread over several years or applied all at once. Under the latter option, one estimate suggested as much as a 14 percent rate hike would be necessary to sustain the system and the infrastructure projects it pays for. That would equate to about a $3-a-month increase for the average residential water user.

[...]

The city’s water/sewer system was on the brink of insolvency shortly after Mayor Bill White took office in 2004. City Council refinanced its debt and set in motion automated increases based on inflation and, last year, population growth. Those increases no longer are adequate to keep pace with the upkeep of the system and the infrastructure projects the city needs to mitigate flooding, city officials said.

[Mayor Annise] Parker said the decision about rate increases will revolve around how many capital improvement projects City Council members decide the city needs. A council committee and a group of transition advisers separately are working on the question of how to fund drainage and flooding projects.

The system also has struggled because the cost of chemicals and power needed to provide water to the city’s 2.2 million residents has outpaced inflation. In addition, Houstonians have not used nearly as much water as was originally projected.

Let’s be clear about a couple of things. First, $3 a month isn’t very much. I don’t know how Houston’s rates compare to the national average, but that’s a pretty fundamental fact as far as I’m concerned. We are talking about a fairly modest increase here, and that’s under the do-it-all-at-once scenario.

Second, everybody talks about flooding and drainage and the need to tackle these problems. I know because everybody talked about it in the interviews I did with Council members and candidates. Well, that costs money. If we’re actually serious about dealing with these issues, we have to deal with paying for them as well. How much do we want and need to do, and how much will it cost? None of this is set in stone yet, but again, this is pretty basic stuff. We can always decide that everything is just peachy as it is and choose to do nothing, or to limit ourselves to little things that won’t cost much. But we can’t say that flooding is a major issue that needs to be addressed and then scream bloody murder when we get the bill for it.

Finally, I’m a little concerned about the fact that the current rate structure isn’t sufficient because people aren’t using as much water as was originally projected. Using less water than we originally thought is a good thing! I daresay the usage distribution among households and businesses is not uniform, however, and I’m sure some water customers have increased their consumption at a faster rate than others. I like the idea suggested by former Mayor White of a fixed base rate to cover debt plus a variable charge based on usage, and I hope that if we go that route we make it as progressive as possible so that the biggest users pay a premium for their excess. Not only is that fair, it also ensures there’s no economic incentive to be wasteful.

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6 Comments

  1. Robert Kane says:

    Charles,

    I’d have to go back and listen what I said to you in my interview, but while campaigning I talked a lot about how we need to expect our water bills to increase.

    I’m sure this will be the 1st in a series of increases, it’s going to take a lot, a lot, a lot of money to put our aging infrastructure in order… and I’m not even talking about addressing drainage and flooding, just water and sewer work.

    remember, 60% of the city is at or beyond the 50 yr life expectancy, it’s been neglected for many years.

    Also, I believe everyone will be talking about budget shortfalls soon, with the decrease in sales tax revenue and when the city finally “realizes” how much of a property tax shortfall it will have due to decreased values and increased delinquencies, the amount that Controller Parker said of 102 million I think will be substantially more.

    The Police contract will be another issue coming to bat… 50% of the dept is eligible to retire and that will be the threat the union uses to get what they want, which we will have to pay dearly for.

    There’s other financial issues the city has that people have buried their head in the sand about too…. it’s not as peachy as we’ve been led to believe.

    Maybe I’m wrong, I don’t think so.

  2. Amy Peck says:

    Charles,
    The big problem I have with the possible increase is that I see no long-term plan in place with our water system. I agree that $3.00 a month might not be very much, but where does it end? I would like to see a long-term plan from our Houston City Council members before voting for the increase. Check out the blog I wrote about this issue at http://www.PeckBlog.com.
    - Amy

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