A West Texas City Cuts Against the Grain for Water Rates

While the U.S. trend is for higher fixed fees, Lubbock’s utility will rely more on water sales.

This spring when I was compiling the data for Circle of Blue’s 2012 water prices survey, I noticed that several cities were shifting more of their revenue from charges on water use to monthly fixed fees. For these cities, conservation and the whims of weather had caused revenue to fluctuate more than desired.

Austin and Charlotte are two examples, as is Las Vegas, which added a new US$5 per month fee to pay for a massive water supply tunnel.

So it is somewhat surprising that Lubbock, Texas is moving in the opposite direction. Yesterday, a city advisory committee endorsed significant changes to the city’s water rate structure, the Lubbock Avalanche-Journal reports.

Mayor Glen Robertson argues that the current rate structure is unfair to poor people, who might use very little water but still pay more per unit because of the high fixed charges, currently US$28 per month.

The mayor also claims the new model, which raises charges on high-volume users, will encourage conservation. He proposes to cut fixed fees by 75 percent over the next three years and more than double the charge for each 1,000 gallons used.

For the next fiscal year, the fixed fee would be cut by 25 percent, and the charge per 1,000 gallons would be increased by 50 percent, from US$2.67 to US$4.00.

Marsha Reed, Lubbock’s chief operating officer, told me over the phone that no consultants were used to prepare the rate proposal and that all the figures were generated within the city government.

Asked if she was concerned about revenue stability when relying so much on water consumption, Reed said simply, “No.”

Rate structures that encourage water conservation are fairly common, especially for cities in dry climates, as Lubbock is. But conservation rates are not usually coupled with such a drastic cut to fixed fees.

According to the Avalanche-Journal, one member of the city’s water advisory commission, which makes recommendations to the city council on water matters, did question the financial strength of the proposal, especially when it is designed to promote conservation.

Nonetheless, the advisory committee voted unanimously to give the rate changes a stamp of approval. The Lubbock city council will vote on the proposal before October when the 2013 budget takes effect.

Brett Walton
Circle of Blue

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