Out-of-city water rates will increase slowly over the next four years, according to a mediated settlement between the city of Marble Falls and residents of Hamilton Creek Ranchettes. The settlement, which was reached in November 2021, was officially accepted by the Public Utility Commission of Texas in May. File photo
“We are glad to have the litigation behind us after reaching what we believe to be an amicable agreement,” City Manager Mike Hodge said in a statement Wednesday, June 8.
According to the settlement, out-of-city water rates will increase each year through 2025 at a rate of 10 percent in 2022, 15 percent in 2023, 20 percent in 2024, and 35 percent in 2025.
The originally proposed rate increases, which was approved by the city in November 2020, were part of a five-year master fee schedule. Rates for city residents will be gradually increased over five years, while water customers living outside of the city limits faced an immediate 50 percent rate increase.
Residents of Hamilton Creek Ranchettes responded by filing a petition with the Public Utility Commission in February 2021. The Site Office of Administrative Hearings referred the matter to mediation, which occurred in November 2021. PUC entered the order approving the agreement, which serves as a withdrawal of the appeal by Hamilton Creek Ranchettes ratepayers on May 12 of this year.
The June 8 media release states that the city did not request payment for legal fees for litigation brought against it nor does it plan to assess a surcharge to outside-of-city ratepayers for any expenses associated with litigation.
“The city worked within the confines of the legislative process to both assess utility rates and settle the appeal by the outside city ratepayers,” reads the statement.
A comprehensive cost of service study, which led to the rate increase in the first place, showed that the average cost of providing water outside of the city limits is 61.8 percent greater than for inside customers.
Without the rate increase, city residents subsidize water services for outside-the-city ratepayers, city officials said when arguing their point before the mediator.
“We do not operate the city utility for profit, rather, to keep the system viable into the future,” Hodge said in the media release. “We feel the outcome justified our process and the fee structure we implemented for customers inside and outside the city limits is fair and just.”