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Marble Falls delays rate increase for Capstone water users in compromise

Capstone Ranch near Marble Falls, Texas

The city of Marble Falls won’t charge out-of-city water rates to Capstone Ranch residents until 2025. The city purchased the subdivision's water system for $7 million in March 2023. Staff photo by Nathan Bush

Capstone Ranch water users won’t pay out-of-city water rates to Marble Falls until 2025, councilors decided Dec. 5 in a compromise agreement. 

The city purchased the subdivision’s water system for $7 million in March 2023. Because residents are not within the city limits, they would have had to pay a much higher rate for water than they are now. As part of the compromise approved at the city council meeting on Tuesday, Capstone residents also do not have to pay a $150 deposit.

“The reasoning behind this is that transitioning to the city’s out-of-rate water rate structure would be a drastic change for those Capstone customers,” said city Finance Director Jeff Lazenby.

Capstone Ranch water customers with three-quarter-inch meters who use 8,000 gallons of water a month currently pay $56 each bill. 

That amount will stay the same throughout 2024 but then almost double to $104.14 a month in 2025. The monthly cost will compound again in 2026 to $122.67, bringing rates for Capstone residents in line with rates for other out-of-city water customers.

Capstone water rate schedule
A table generated by the city of Marble Falls shows what average ratepayers with three-quarter-inch water lines who use 8,000-12,000 gallons a month can expect to pay for the next three years. Courtesy chart

City officials crafted the revised schedule after meeting with Capstone residents on Sept. 13 to hear their concerns. 

The sale of the Capstone system closes on Dec. 15. 

“(After Dec. 15), public works crews will begin swapping out Capstone customers’ meters with the city’s meters,” Lazenby said. “The customers will transition to the city’s billing system effective for the Dec. 16 billing cycle.”

The city of Marble Falls will mail out a notice informing Capstone residents of the new rate schedule over the next few days.

The logistics of bringing the Capstone system online with the city’s system also led to the delayed rate increase.

“It’s going to take at least a year to do all the engineering and to get them connected to anything,” Mayor Dave Rhodes said. 

The Capstone water system serves roughly 30 households in Capstone Ranch, a neighborhood located south of Marble Falls off of U.S 281. 

The groundwater system is currently permitted by the Central Texas Groundwater Conservation District to pump about 500 gallons of water per minute. That equals around 720,000 gallons a day, which is half of what the city treats out of Lake Marble Falls. Marble Falls currently only uses water from the lake as a firm water customer of the Lower Colorado River Authority.

Marble Falls officials originally pitched purchasing the Capstone system to accommodate the city’s growing population and diversify its water sources. The lower cost of purifying groundwater as opposed to lake water was another consideration.

“It’s groundwater, so it’s much more cost-effective to treat,” Deputy City Manager Caleb Kraenzel said during a March 21 council meeting. “It doesn’t require half of the chemicals and treatment processes as a surface water plant.”