By Andy Sevilla
The ongoing acerbic feud between the city of Kyle and Monarch Utilities has found new ground for battle, as the private utility moves forward with water rate hikes and the city prepares for a legal counter.
Monarch Utilities, which services about 1,000 customers in Kyle and Buda, filed a rate application with the Texas Commission on Environmental Quality (TCEQ) on Sept. 3 in hopes of raising water and wastewater rates by 14.4 percent beginning Jan. 1.
Kyle city council members unanimously approved a resolution Sept. 17 calling for the suspension of the rate increases for 90 days from the effective date of the price hikes. The approved resolution buys city officials time to review and analyze the estimated 1,100-page rate application and it serves to protect the “health and welfare” of the approximate 1000 Kyle residents serviced by Monarch by delaying any potential rate jumps for as long as possible, according to city documents.
Monarch has proposed a two-phase rate increase for water and wastewater. The water company would increase the rates by 9.9 percent on Jan. 1 and by an additional 4.5 percent six months later. Under Monarch’s rates hike proposal, customers could see their water and wastewater bill swell from $144.8 to $166.3.
The proposed increases would raise the price of a Monarch customer’s water bill by $11.06 for 5,000 gallons of water per month - $7.38 increase in Jan. and an additional $3.68 come July, according to Monarch documents.
The current Monarch monthly water bill for 5,000 gallons is $74.40. After the proposed Jan. increase, that bill would rise to $81.78, and once the proposed July rate jump kicks in, the bill would total $85.46.
Monarch’s wastewater customers would see the $70.40 monthly bill for 5,000 gallons rise by $6.98 on Jan. 1. That figure would increase by an additional $3.46 on July 1, for a total wastewater bill of $80.84 for 5,000 gallons under Monarch’s proposal.
By comparison, a Kyle water customer presently pays $46.96 for 5,000 gallons of water and $32.20 for 5,000 gallons of wastewater. On Oct. 1, when the new city rate increases go into effect, Kyle customers will pay $56.33 for 5,000 gallons of water and $35.39 for 5,000 gallons of wastewater.
With the new rate hikes set to take hold on Oct. 1, Kyle will have raised water rates by 70 percent from fiscal years 2012 to 2014, and wastewater rates by 55 percent during the same period.
City leaders implemented a rate increase three-year plan aimed to balance the utilities revenues and expenditures.
The private water utility, a subsidiary of the SouthWest Water Company, considered several factors in preparing its rate application, according to a Monarch news release. Last year, the water company invested $3.5 million in “critical” plant and equipment improvements, and the water company said in a statement that their wholesale water purchase costs have increased and costs of services remain greater than the income received from customer rates.
“Taking these factors into account, Monarch’s cost-of-service study supports a rate increase of approximately 44 percent, but in an effort to be conciliatory with customers, the company is not doing so,” Monarch said in its statement.
Kyle, however, is poised to fight any increase in rates by Monarch. The city will continue its membership in the Coalition of Cities, including Buda, Blue Mound and Ivanhoe, who in the past successfully delayed rate hikes from going into effect during the pendency of the rate proceedings.
Kyle also affirmed and ratified the hiring of special counsel Jim Boyle, who has represented the Coalition of Cities in previous dealings with Monarch, to do “all things necessary to be an effective advocate for the city and its ratepayers before the Texas Commission on Environmental Quality or before Texas courts,” the resolution stated. Kyle will also seek “prompt reimbursement” from Monarch for expenses incurred during the rate case process.
The 3-year rate increase plan for Kyle water and?wastewater service included the following annual changes:
Year 1 (FY 2012): Water 30% Wastewater 25%
Year 2 (FY 2013): Water 20% Wastewater 20%
Year 3 (FY 2014): Water 20% Wastewater 10%
