The water tower in the Amberwood subdivision is owned by Monarch Utilities LP, a subsidiary of SouthWest Water Co. Before its name was changed in 2005, Monarch was called Tecon Water Holdings. (photo by Wes Ferguson)
By WES FERGUSON
Call it calculated outrage.
At a time when the city of Kyle is drastically raising rates for water and wastewater customers, city leaders are joining a fight against a private water provider that has also taken steps to drastically raise rates – though not in Kyle.
The city has long coveted the 2,300 customers who get their water from Monarch Utilities LC, a company with exclusive rights to provide service to a corner of the city’s northeast side.
Monarch’s water supply can’t keep pace with the city’s rapid growth, according to municipal leaders. They argue the company’s supply is so inadequate that efforts to lure major businesses to Kyle have been impaired. The utility is infamous for low water pressure, poor quality and overpricing, said Kyle City Manager Lanny Lambert.
“There is no respect for Monarch,” he said.
In its ongoing fight with the utility, Kyle is now teaming with other cities around the state to oppose a round of severe water and wastewater hikes proposed by Monarch. Local customers in Kyle haven’t seen the latest increases yet, but city officials say it’s only a matter of time before they do.
“This is a statement of outrage against Monarch,” Lambert said. “Our City Council does not feel Monarch is good for our city, and we do not support anything that Monarch wants to accomplish.”
Though most Kyle residents get their water from city utilities, about an eighth of the homes in Kyle rely on Monarch for service.
Last Tuesday, the Kyle City Council voted to join a coalition of cities – including Pflugerville and Blue Mound, north of Fort Worth – opposing the rate hike as well as opposing Monarch’s plan to consolidate the rates of several different utilities into one set of tariffs.
Monarch company officials have said the rate increases are necessary to recoup $70 million spent replacing old pipes, upgrading sewer treatment plants and drilling new wells. Janice Hayes, a spokeswoman for Monarch’s parent company, SouthWest Water Co., declined to be interviewed for this story.
“We have not filed for a rate increase with the city (of Kyle) and at this time I cannot address any rate-related questions,” she said in an email.
Kyle has made attempts to acquire Monarch’s customers. Lambert’s predecessor tried to purchase the utility from Monarch, but negotiations failed when the city balked at the utility’s asking price of $20 million. Lambert also said the city has considered running its own water lines to the two Kyle subdivisions served by Monarch, Amberwood and Indian Paintbrush.
“So far the lawyers don’t think we can do that,” Lambert said. “But we continue to explore our options through TCEQ rules and policies and the possibility of changing TCEQ rules.”
Changing the rules might require an act of the state Legislature. After Monarch’s rate increases were announced in May, state Sen. Kirk Watson vowed to investigate abuse from investor-owned utilities such as Monarch which are shielded from competition as an incentive to provide water to rural parts of the state.
In a bit of unfortunate timing last week, City Council members voted to raise rates for their own water customers during the same meeting in which they vowed to oppose Monarch’s rate hikes.
Kyle’s average monthly water bill is increasing by 30 percent this year, 20 percent next year and 20 percent again in 2013.
A Kyle residential customer who lives inside the city limits and uses 7,000 gallons of water a month will spend $56.55 a month on water in the next fiscal year, according to budget documents. The water bill climbs to $67.90 in the following year and $81.48 in 2013.
A similar Kyle customer who lives outside the city limits will pay $64.39 in the next fiscal year, $77.27 the following year and $92.72 in 2013.
By contrast, a Monarch customer who uses 7,000 gallons of water a month pays $77.49, according to information provided by the company. That customer would pay $108.82 under rate increases that have been proposed in other areas of the state.
What Monarch customers say:
“Used to, the water was very poor quality. I think they’ve improved it a lot. The water tower used to leak, and there was a lot of water that would run down the streets, but they seem to have corrected that problem. But I guess the biggest problem right now is that the rates are just really high. I usually pay around $70 just for water, and then we pay the city of Kyle for wastewater and garbage pickup. So for the month, utilities are usually around $100 or so.” — Nancy Summerville, Kyle resident
“Do you want my redneck version, or my professional version? I think it sucks. Hell, who wants to pay that kind of bill? I can’t afford to water my grass with the rates that high, so I just quit watering. I was averaging about $60 a month. Now it’s gone up to about $130 or something like that. For water alone.” — Larry Marley, Kyle resident
