The Brown County Water Improvement District #1 unanimously approved their 2013/2014 fiscal year budget at their board meeting Tuesday and increased rates for both treated and untreated water that they sell to local municipalities and retail water providers.
Treated water rates will go up to $1.4636/1000 gallons, an increase of 6.65% over last year while untreated rates will rise $0.7496/1000 gallons, up 7.68% over last year.
The new fiscal year budget is up just over 6% from last year pushing it over $2.8 million and includes a few new items not in a normal year’s budget according to BCWID General Manager Dennis Spinks.
“The only addition to this budget that is not normally in the budget is a purchase of a new boat for the Lake Patrol,” Spinks said. “This budget does include a 1% cost of living raise. What we are proposing to the board is we also have a $50,000 annual recovery of investment in the well project.”
Spinks outlined a proposed budget at last month’s board meeting that called for treated water rates to go up 5.09% and untreated water rates increasing 4.60%, but the $50,000 recovery amount for the well project was added since then that caused the water rates to increase in the proposal.
Brownwood City Manager Bobby Rountree addressed the board regarding this change prior to their vote and questioned the reasoning behind the board starting to recoup the cost of the test well through a rate increase at this time.
“You have your reserves for times like this, when you have issues that come up you don’t budget for,” Rountree said. “You use that for these types of projects, and when times are good you replenish your reserves.”
Spinks said that the water district currently has about $4 million in reserves, but about a million of that or more will be used to pay for the test well project up front and to take care of a projected budget shortfall that is expected for the current fiscal year.
“My request is you not raise rates over the 5.09% and replace your reserves whenever we have good rains again and not require your treated water customers to pay that cost for drilling your test well,” Rountree said. “Rather than try and recoup a portion of the test well from your rate customers, why not recoup it by the way you have in the past with the sale of properties or if you have a good year for water sales, put that money back in reserves.”
BCWID board president Mark Campbell outlined the board’s perspective on adding the rate hike and the extra $50,000 in the budget this year to help pay for the test well project.
“Bobby, we discussed paying it back at a higher rate, $100,000 a year over 10 years; we discussed what we are benefiting by having that reserve in the fact that we aren’t paying an interest rate; we are borrowing that money at basically zero percent and we are passing that savings on to our customers,” said Campbell. “We felt like we trimmed it (the budget) as much as we could and we needed to start trying to get that money back at some point, and we have discussed that it doesn’t mean we have to do it every year, we don’t have to do exactly $50,000 this year and next year. We can do more as times get better.”
Brownwood’s Director of Public Works David Harris also expressed his personal opinion to the board about treated water customers paying for the test well project through higher rates at this time.
“I have problems with the $50,000,” said David Harris who said he was addressing the board as a water customer and not a representative of the City of Brownwood. “So far from what I am seeing, we have the same test results that I gave the water district two years ago.”
Harris said that the early results emerging from the district’s test water well project, which is wrapping up, revealed the same information about the quality of water that was already available.
“When you decide to drill a test well, and we are finding out the same information that we knew, now we have to pay it back, but the answers we are getting right now are the same as we had two years ago,” Harris said. “So that is why I have a hard time paying for this well project when we are finding out the exact same things we already knew, that is why I have a problem with it as a paying customer.”
Spinks said that he understands the City of Brownwood’s position on the issue, but that the district needs more revenue to operate.
“I understand where Bobby is coming from and I don’t disagree with him, but you can only go so long on a flat budget,” Spinks said.
Spinks said that over $2 million of the district’s reserve funds were generated several years ago after the district sold property around the lake.
“It was recommended that we set aside those land sales and not touch them until an emergency arises,” Spinks said. “You can keep putting it off, and putting it off, but sooner or later you’ve got to catch up.”
The district unanimously approved their new budget that includes the $50,000 to begin recouping the money they will spend on the test well project with the higher water rates. These new rates will ultimately be passed on to area water customers though their water bills.
The Brown County Water Improvement District began the test water well project to look for an alternative source of water in Brown County. Officials have stated if an adequate volume of water can be attained with treatable quality, they may begin drilling several production water wells to augment Brown County’s water supply.
The $737,250 test well drilled by Stewart Brothers Drilling of New Mexico has reached the desired depth of 3600 feet, punching through the Ellenberger and Hickory Sands Aquifers. Consultants DB Stephens already released preliminary results on the well, but are continuing to take samples and will begin a well pump test soon.
Spinks has said the board will make a decision on whether to move forward with production wells in the next few months based on the final results of the test well.
Pictured is Rountree speaking to the BCWID board Tuesday night.
