Mineral Wells enacts 146 percent water rate hike

Weatherford Democrat
By Glenn Evans gevans@weatherforddemocrat.com
September 14, 2023

MINERAL WELLS — Residents will face a 146-percent water rate hike after council members on Tuesday approved the measure to put muscle in the city’s bid for loans to build a new water supply lake.

The hike arises partly from the city’s plan to build Turkey Peak Reservoir. But more than half of it is coming from rate increases the city faces on what it pays Palo Pinto County Municipal Water District No. 1 for water from Lake Palo Pinto.

Sixty-eight percent of the hike is a pass-through of a two-year, $3 million increase Mineral Wells is facing from the water district that sells Lake Palo Pinto water to the city.

The district-imposed cost increase will take the city’s annual water expense from about $2 million to $4.9 million.

And higher water bills are not just a Crazy Town phenomenon.

Customers of the seven water wholesalers, who sell water to 37,000 meters throughout Palo Pinto County and in south and west Parker County, can expect to share the pain with Mineral Wells city residents.

“It’s decision day now,” Mayor Pro Tem Doyle Light said. “It would have been nice if we had bitten this off 20 years ago. ... I know a lot of my constituents maybe don’t fully understand. I don’t like the cost of the increase, but I have to support this because we have a vision for the city of Mineral Wells. and without this that’s not going to happen.”

The water new rates, which include a 3.8 percent hike in sewer service, take effect on Nov. 1.

Tuesday’s decision will raise monthly water bills in the city from $55.37 now to $187.31 by 2028.

It’s not just about a lake.

Two-thirds of the increase (68 percent) is from that $3 million in increase the city faces this year and next year from Palo Pinto County Municipal Water District No. 1, which owns Lake Palo Pinto.

The district is raising its price on the city $1.5 million in the fiscal year that begins Oct. 1, plus an equal amount in fiscal 2024-25.

Those increases are from debt the district took on and, the second year, from expiration of American Recovery Plan Act funds in fiscal 2025.

The portion of the 146 percent monthly water bill hike attributable to the lake proposal is 78 percent. The rest of the higher monthly bills will happen with or without Turkey Peak Reservoir.

Also in Tuesday’s meeting, council members Beth Watson, Jerrell Tomlin and Kyle Kelley volunteered for a “Subcommittee on Water Rate Affordability.”

The trio will examine ways to ease the rate hike burden on residents, including exploring a senior citizens rate adjustment. Watson previously suggested using some of the budget’s unassigned fund balance to help residents struggling to pay the new rate.

City Manager Dean Sullivan stressed that engineers built the new rate structure on a premise of the city building Turkey Peak Reservoir with bonds borrowed on the strength of the higher water rate.

Hence the name, revenue bonds.

The consultants had recommended a 164 percent increase, lowering that to 146 percent when the city asked to rerun the numbers on a 30- to 40-year bond repayment schedule. The first calculation was on a decade shorter note.

Sullivan told the council on Tuesday that he and Howard Huffman, general manager of Palo Pinto County Municipal Water District 1, recently met with officials with the U.S. Department of Agriculture to enquire about funding assistance.

Mineral Wells’ high poverty rate, at 17.2 percent on the 2020 Census, places the city in a better position for the U.S.D.A. aid, he said.

“I don’t think we can use that for lake construction,” he said, adding “they were very positive” about help with an osmosis unit to clear Brazos River water of salt.

The city will need to buy or lease an osmosis unit if Stage 3 Drought is declared.

“We’re not going to stop seeking funding assistance,” Sullivan told the council. “We’re very confident, within the next three years, all things being equal ... we will be able to get that rate into a manageable level.”

Sullivan emphasized the city is not imposing a so-called drought surcharge on monthly bills, a prospect that was discussed but swiftly discarded in a previous meeting.

“That is absolutely false,” he said of the surcharge going on bills.

Sullivan also announced he and Huffman are set to meet in Dallas on Monday with bond lawyers, engineers and others to nail down costs and roles attached to the lake.

That meeting also should yield answers such as exactly who will own the new lake and how the city and Palo Pinto County Municipal Water District No. 1 will juggle contracts to build the lake, which will be immediately south of the existing lake’s dam.

“Those are the nuances that we need to work through,” Sullivan said, ”That is exactly what we will come back away from Monday’s meeting with, is those agreements. ... and we’ll come back with the exact legal essence of what is required.”

The district owns Lake Palo Pinto, while the city appoints its governing board under a 1981 agreement. Sullivan said he would report on the Dallas meeting at this coming Tuesday’s council meeting.

News of the looming water rate hikes drew a crowd on Aug. 15 which exceeded council chamber’s 49-person capacity (including the foyer).

No such crowd appeared Tuesday, despite calls on a popular Facebook discussion group to attend.

But the higher water rate is almost certain to impact household budgets far beyond Mineral Wells.

It will be up to them, but the seven wholesalers selling water to 37,000 people throughout Palo Pinto and south and west Parker counties could plausibly raise rates on those non-Mineral Wells residents if the city charges them more.

Some of them locked in new contracts this past year, though. It’s the ones that haven’t whose customers are most at risk.

The vision Light cited is expensive.

It focuses on ensuring the growing town of just over 15,000 secures a better water source than the lake where a falling water level threatens to trigger Stage 3 Drought restrictions.

But it also includes a new water treatment plant to replace the 60-year-old facility now under a state violation notice for a lack of capacity.

“They are doing miraculous things to keep that plant even functional,” Ward 1 Councilman Tomlin said, describing a tour he taken of the Hilltop Water Treatment Plant two weeks ago. “It was considered a 50-year water treatment plant, and we’re dozens of years beyond that. We can do better, and we don’t want to put this burden on our children and our grandchildren.”

In addition to the $200 million lake, designed with a smaller surface so it won’t evaporate as readily as Lake Palo Pinto, a new water treatment plant is estimated at $41.4 million.

Upgrades to a lift station, that will push lake water blended with newly acquired Brazos River water to the Hilltop plant, is expected to add another $29 million.

Plans to increase the volume of so-called reuse water at the wastewater treatment plant, water that can be used by carwashes and on plants but not drinking, add another $7 million.

Another large expense looms if Stage 3 Drought is declared, that is, if this week’s rainfall doesn’t raise the lake above the trigger it reached last week.

Stage 3 would add a requirement to buy or lease reverse osmosis units to suck salt out of Brazos River water the lake district has secured.

Osmosis units, which the city does not own, cost about $9 million but can be leased for $900,000 to $1 million a month. Supply chain issues, however, place delivery of units months away.

Renovation of a donated former natural gas plant into a public works complex has been scrapped for now. That subtracts $3 million from the capital improvements price list.

The council on Tuesday also wrapped up a summer of budget talks, approving a $48.3 million spending plan for the fiscal year beginning Oct. 1, fueled in part by a 59-cent tax rate. (The full rate is 59.39 cents).

It represents slightly more than a 10 percent increase from this past year’s rate.

In approving the budget, Light commended Sullivan and Finance Director Jason Breisch and his staff for addressing a problem that rose to the top during workshops this summer.

It’s a common challenge for cities, that are near enough to commute to higher paying jobs in bigger towns, to keep staff after training them for jobs they can take elsewhere.

Typical starting pay for city staff was $16.11 an hour this past year. and while it doesn’t reach the $20 hourly benchmark Light said staff deserve in the new budget, it does close the gap.

“You did an excellent job hearing us and trying to get salaries and the personnel situation to a more tolerable place,” Light told the budget writers. “And I appreciate that very much.”