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With the Lower Colorado River Authority announcing a water rate increase for its firm water customers, including municipalities, Cottonwood Shores officials are grappling with how to deal with it on their tight budget.

The city has fewer than 1,600 residents and a limited business district to provide its tax base, so every penny from property tax and sales tax gets stretched as far as possible. The LCRA Board of Directors voted to increase firm water rates on Oct. 20, which will go into effect January 2022, about four months after many cities, including Cottonwood Shores, set their fiscal year budgets.

Currently, Cottonwood Shores pays the LCRA $92,800 annually for 495 acre-feet of raw water at the old rate of $145 per acre-foot. At the new rate of $155 per acre-foot, City Manager J.C. Hughes calculated a payment to the LCRA of $99,200.

“We’re starting $6,400 in the hole that we never expected,” he said. “We have to hope the revenue comes in. We could have incorporated it into our budget. We have a thousand things in our budget we incorporated.” 

City leaders can’t pass the increase to residents just yet, so the extra money has to be found elsewhere. Hughes said he did not know from where. 

LCRA Vice President of Water John Hofman told the Board of Directors during the Oct. 20 meeting that “no one is going to jump up and applaud when you do a rate increase.” 

Cottonwood Shores Mayor Don Orr and Hughes didn’t share an opinion on the increase itself. What troubled them the most, they said, is the timing of the rate increase.

Orr told the City Council during its regular meeting Oct. 21 that he attended an LCRA meeting in early October.

“My question (to the LCRA board) was, ‘Why do this after municipalities set their budget? We can’t do anything about this until next October,’” he told the council. “(Their response was), ‘We probably should have done that.’”

What also was never made clear, Hughes said, was exactly when the rate increase would happen. 

“It’s disappointing we didn’t receive formal notice for us to include in our final budget for the 2021-2022 fiscal year,” he said.

jfierro@thepicayune.com