Updated 3:45 p.m. CST on Feb. 18, 2014

During a Feb. 13 meeting, Cedar Park City Council members and staff voiced opposition to a proposal that would raise costs for certain water customers.

On Jan. 14, the Lower Colorado River Authority proposed an 18.5 percent annual increase for city water customers for five years starting in January 2015. Assistant City Manager Sam Roberts said that would add about $1.25 and later $3.50 to an average Cedar Park resident's monthly bill.

In the first year, Cedar Park residents would pay $450,000 more than the current rate, and by the fifth year an additional $1.65 million, he said.

Roberts said city staffers understand LCRA must improve its water system. But the city disputes how the organization plans to allocate costs for firm customers, who have continuous service, and customers whose service can be interrupted, he said.

Firm customers include cities and other water providers such as municipal utility districts. Interruptable customers include downstream rice farmers with large irrigation operations, Roberts said.

Three such rice farms are owned by LCRA yet operated by private groups, he said.

"Between the year 2000 and year 2010, [irrigation customers] have used on average 70 percent of all the water pulled out of the river system," he said.

City staffers understand the region's challenges of drought and uneven rainfall, Roberts said. But he said staffers disagree with LCRA's proposed cost distribution—with firm customers paying 88 percent and interruptable customers paying 12 percent.

"The explanation that they've given us so far [about] how they arrived at this formula does not make sense, based on what we see as who will benefit from the project," Roberts said.

Councilman Lyle Grimes, Place 3, said LCRA effectively wants to raise city customers' rates to help pay for water used by downstream customers, the rice farmers.

Councilman Jon Lux, Place 5, said he agreed the proposal did not make sense.

"You're building this reservoir that's not going to work, clearly for the rice farmers, at the expense of Cedar Park," Lux said.

Cedar Park pays about $151 per acre-foot of water, enough to supply three average houses for one year. Counting other costs, rice farmers pay about $26 per acre-foot, Roberts said.

Mayor Matt Powell and other councilmen questioned why Cedar Park customers should pay more to benefit the rice farmers.

"In essence, are they [at LCRA] going to make us a type of crop insurance?" Powell asked.

Cedar Park likely used less water from Lake Travis than evaporation removed, he said.

"At some point someone needs to have the courage to ask the greater question," Powell said. "With the demographics of Texas being what they are and where they're going, the realities of the varying rainfall that we've gotten is an incredibly water-intensive crop really the future here? And how many families in municipalities should have to bear those costs?

"We don't tell anyone when they move here: 'Oh, by the way, you may be facing massive water rate increases to help subsidize an irresponsible crop downstream,'" Powell said.

Roberts said LCRA has cited three main reasons for a rate increase. He said those include the lack of water sales to interruptable customers such as the rice farmers, and the recovery of costs such as a $30 million legal settlement after a San Antonio Water System lawsuit.

But a costlier reason is a $206 million planned reservoir near the town of Lane City, he said.

"This off-channel reservoir is designed to have excess pumped water from the river into it during rainy periods, like we had last fall when we got all the excess rain," Roberts said. "You fill it up with pumps, then during the irrigation season for the rice farmers—which goes from March to September—you release water from that basin."

The reservoir would be 40,000 acre-feet in volume or about 13.3 billion gallons. It would cover 1,250 acres to a depth of 32 feet, Roberts said.

"They say the reservoir will reduce demand on stored water in the lakes, thereby maintaining better lake levels, and it will reduce the chance of them having to cut off the rice farmers," he said. "And on paper, that's true."

But the proposed reservoir would also be vulnerable to droughts and evaporation, and Roberts said firm customers should not be forced to pay for interruptable customers' irrigation costs. After all, Cedar Park pays for its own fixed costs for pump stations and pipelines, he said.

"[LCRA says] that they need to recoup these costs during the years that they're not getting any revenues from the [agricultural] customers," Roberts said. "Our counter to that is that they should build those costs into the rates that they charge those customers. We feel it's all moving too fast, both the reservoir and the rate process."

Correction: The original article included a projected 2015 water cost hike as $45,000, rather than $450,000. It also and said four rice farms are owned by LCRA, rather than three.