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Water and wastewater rate increases part of new Cottonwood Shores budget

Cottonwood Shores budget workshop June 30, 2022

The city of Cottonwood Shores could vote on a preliminary budget at the City Council's regular meeting July 7. Pictured at a June 30 budget meeting are city Financial Officer Karrie Cummings, Mayor Donald Orr, and City Administrator J.C. Hughes. Staff photo by Nathan Bush

Water and wastewater rates could increase as much as 13 percent with passage of the 2022-23 city of Cottonwood Shores budget. The city leaders and the City Council discussed raising rates during a workshop meeting on Thursday, June 30. The increase is included in the proposed budget presented by Mayor Donald Orr at the workshop. 

The proposed 13 percent increase includes the projected addition of 50 new homes. Without any new homes, the increase would be 6.8 percent, according to Orr’s numbers. New homes are being built in Cottonwood Shores, but not yet 50, the mayor said. 

The rates increase because more homes would be drawing on a set amount of water the city buys each year from Horseshoe Bay. Going over the contracted amount increases water rates. 

“I believe this to be a conservative set of numbers,” Orr said. “I calculated everybody’s usage, whether they were inside the city, outside the city, commercial, or residential. I used inside-the-city-residential, which are the lowest set of rates. I just didn’t have any mechanism to calculate any of the other rates.”

Without the projected 50 homes, the actual rate increase for current residents would be closer to 6.8 percent. Councilor Michael Hibdon voiced his concerns over even that rate increase. 

“To project a 6.8 percent increase in water and wastewater for the residents seems a little high,” Hibdon said. “I think residents are going to balk at that. We already have some of the highest rates in the area.”

Orr reminded Hibdon that the money had to come from somewhere, especially if rates are decreased.

“If we decrease water rates, we’ll have to increase revenues somewhere else or we will have to decrease costs somewhere else,” Orr said.

Hibdon warned Orr that these rate increases could scare off potential builders looking to develop in Cottonwood Shores. 

“I think we’re getting to the point where builders will start looking at other places because our rates and utilities are too high,” Hibdon said. “I’ve already heard that from several people.”

Mayor Pro-Tem Cheri Trinidad commented that it might be easier to go with the rate structure laid out by Orr and then decrease the rates during the mid-year budget review.

“I am the first one to not want multiple rate increases on utilities,” Trinidad said. “I would love to make this a good projection and then come out ahead. I would love to tell (residents) in six months that we can take $5 from their bill. I don’t want us to not be honest now and have to raise it in six months.”

The budget workshop also touched on issues regarding worker retention. In recent years, the city has struggled to retain public works employees. 

“We’re having to go through some (salary) increases, particularly in the public works area so that we can keep our people,” Orr said.

In the 2022-23 budget, Orr created a new public works position and increased hourly wages to $19 an hour. The city also plans to raise city salaries by 3 percent as it continues to battle inflation. 

As it stands now, Orr’s budget is still in the red by $30,000. The mayor assured the council he would meet with City Administrator J.C. Hughes and balance the budget before the next regular meeting.

The city will finalize a preliminary budget for 2022-23 during its regular City Council meeting at 6 p.m. on July 7 at 4111 Cottonwood Drive.