Here's why your water rates are going up in 2021
By: Glissette Santana
Residents can expect to see higher utility bills beginning this next month as the City of Sugar Land prepares to meet a countywide water mandate.
The increases are necessary in order to make preparations to comply with the Fort Bend’s Subsidence District’s groundwater reduction mandate, to fund strategies identified through the Integrated Water Resources Plan (IWRP) for the long-term water supply needs of the community, and to pay for regular cost increases in order to maintain current service levels.
City staff estimate the average residential utility bill will increase by approximately $10 per month beginning January 2021.
What is the groundwater reduction rate and IWRP?
In 2014, the Fort Bend Subsidence District required the City to convert 30% of its water demand to non-groundwater sources. The City utilizes surface water from the Brazos River and Oyster Creek, said Katie Clayton, Assistant Director of Public Works for the City of Sugar Land.
The City was able to abide by this mandate efficiently thanks to the Surface Water Treatment Plant. The plant, however, does not have the resources to abide by the next phase that the City needs to be at 60% alternative or non-groundwater sources by 2025.
Two groups, the City Council Task Force and a Citizen Task Force, were tasked with identifying areas of improvement and outlining solutions needed for Sugar Land to take steps toward converting to alternative or non-ground water supply.
The two groups, who met separately on a monthly basis for two years starting in March 2017, outlined a plan that would also meet goals and objectives within the community, such as:
- Providing reliable water supply
- Optimizing water resources
- Promoting system efficiency
- Developing cost-efficient solutions
- Protecting the environment
- Maintaining quality of life
- Promoting equity
The IWRP is a result of the work of both task forces, as well as city staff and consultants who were hired to help flesh out the needs of the City.
“All of the projects within the IWRP have a purpose,” said Brian Butscher, Deputy Director of Public Works for the City of Sugar Land. “We have the reliable infrastructure that is needed in order to meet our future needs.”
The City will complete projects outlined in the Integrated Water Resource Plan (IWRP), a plan that takes a bigger look at the Sugar Land’s available water supply and infrastructure, which City Council approved in 2019. Projects include expansion of the City’s Surface Water Treatment Plant, adding water conservation programs, expanding reclaimed water facilities and implementing advanced metering infrastructure throughout the City.
“We have a lot of improvements that we need to do,” said Jennifer Brown, the City of Sugar Land’s Director of Finance. “About $130 million of utility projects are included in the five year CIP, many were identified in the IWRP, which plans for the long-term water needs of the city … With that plan, we know what to build, and we’ve got to build (up income) over time, rather than waiting until 2025 when we have to meet the mandate.”
In addition to meeting the mandate, the City is looking to be proactive when it comes to subsidence, the settling or shrinking of land because of compaction of the ground below it. A conversion to the use of alternative or non-groundwater sources would decrease the likelihood of subsidence around Sugar Land, according to the IWRP.
How did the City arrive at an increase of $10 per month?
Staff has been working on a FY20 Strategic Project to complete a comprehensive utility rate study. The study looks at the comprehensive cost of water – including all fixed and variable expenditures, which results in the development of a tool that will allow the City to forecast long range revenue needs and develop a rate structure designed to maintain City service level standards. The project is currently in its first phase.
Phase I focuses on computing the current cost of service for the different facets of water utilities including surface water, potable water service and wastewater. Phase I also includes updating the existing rate model to reflect the City’s current operations. This model is being used to validate the current revenue requirements and will be used as the base for implementing the policy decisions to be made in phase 2 in phase 3 of the project.
Based on the feedback, staff worked with a consultant to develop a solution that is based around a targeted monthly increase of $10 to the average residential bill. The structure has been reviewed by the rate consultant and is feasible in the long term. The rates, however, are set on an annual basis, and changes to CIP or operating costs or other conditions can influence future rates.
What happens now?
The projects must be done in phases, so residents should expect to see increases to their utility rate bill over the next several years to create the appropriate revenue stream needed to successfully convert the City to 60% use of alternative or non-groundwater supply. The City Council can only set rates one year at a time, but is on board with the financial plan as outlined in an update to the utility rate study.
The actual implementation of projects is also expected to go on past 2025 to support projected growth.
Because the utility rate system is self-supporting and doesn’t rely on property taxes, these rate increases do not need to go before voters for approval. The 2021 increases were approved by City Council in September 2020 as part of the budget process.
Any future changes to rates can be expected to be considered as part of the annual budget process with City Council voting in September.
Glossary of terms
Subsidence – the settling or shrinking of the land surface due to compaction of the ground below it and can result in increased potential for localized flooding
Groundwater – water that lives deep underground, usually contained in or by a layer of rock or soil
Surface water – think of this as lake, stream and river water. The City of Sugar Land uses the Surface Water Treatment Plant to pump water out of these sources and clean it for public use and consumption.
Integrated Water Resource Plan (IWRP) – a comprehensive plan created to meet increasing groundwater regulations by 2025