Some Austin residents who have unexplained increases in their future water bills may see relief as a result of a new city resolution approved in April.
Austin City Council Member Ellen Troxclair, who represents District 8 in Southwest Austin, said the city’s new resolution, a water bill refund policy, was developed after an influx of calls Austin city offices received related to high water bills last year.
“When we talk about cost of living in the city, a big part of your expenses are your utility bill,” Troxclair said.[polldaddy poll=9399938]
The problem
The city took about 25,000 calls about unusually high water bills in September, said David Anders, assistant director of financial services for Austin Water, which provides water to Austin residents. In that group, there were 14,000 customers who had bills that were three times higher than their previous year’s average cost for the month, he said. Weather was a factor, he said, explaining after heavy rains there was a period of about 60 days when it did not rain, affecting water usage.
Many of the calls came from Southwest Austin residents, Troxclair said.
City staff investigated claims, some of which were found to be leaks. Another issue was that two areas—Lost Creek and River Place—had been on municipal utility district rates and switched over to AW in October 2014, so those residents were experiencing their first summer with Austin’s rates, Anders said.
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Troxclair said the city’s public utilities committee asked AW to expand the scope of its investigation and bring in a firm to conduct an external audit.
“It became clear to me we needed to put a process in place at the city level … so that going forward [customers] wouldn’t be put in this position again, so the customers felt like they were protected and they weren’t going to be blindsided,” she said.
The audit conducted showed most meter readings were accurate, Anders said. However, some readings were not.
According to the audit report released in January, 3.4 percent of audited water meters were identified as having either a read discrepancy of more than 500 gallons or could not be read at all, meaning more than 7,000 customers may have been incorrectly billed, Troxclair said.
New policy
The resolution does not address last year’s high bills, Anders said.
“This resolution came out of looking at the high water bills, but this isn’t a comprehensive answer to high water bills,” AW spokesperson Jason Hill said.
Instead it directs the city manager to propose code amendments to AW service regulations related to the unusual high bill administrative adjustment.
Water billing spikes spark city resolution[/caption]
When a customer gets an unusually high water bill, the city conducts an investigation. If the bill cannot be explained—if a customer was out of town and could not have used the water, for example—the city’s policy allows the customer to submit an application saying he or she did not use the water. After reviewing the application, the city may decide to provide an adjustment on the bill, Anders said.
With the new resolution, residents billed for an unexplained spike in water usage that is more than three times their average usage for that month can apply for a credit of 50 percent of the month’s excess water usage—once every two years if necessary, Anders said. The policy is similar to the city’s leak-protection policy as well as to the city of Houston’s water bill refund process, Anders said.
Council Member Ann Kitchen, who represents District 5 in South Austin, noted at the April 7 meeting that the resolution says applicants may not be eligible for an adjustment if it looks like their actions were causing the spike.
“We have to have some mechanism for dealing with [unexplained spikes] in recognition of what those particular people were going through,” Kitchen said. “... I think this is the best approach.”
The resolution passed with a 10-1 vote. Mayor Pro Tem Kathie Tovo voted against the resolution, citing legal, fiscal and environmental concerns.
City staff will draft amendments to the code, which will go back before council in May for consideration, Anders said.
Separately, AW is proposing an upgrade to city water meters that would allow meter readings to be collected electronically instead of manually with the goal of improving reading accuracy, according to city documents. At its April 21 meeting, City Council voted to approve an application for an $80 million low-interest loan from the Texas Water Development Board to fund a “smart meter” program at AW.
How AW bills work
A meter outside a homeowner’s house records how much water is used. Meter readers are dispatched monthly to record and report data to the city. Council-approved water rates go through the budget approval process each year. Water and wastewater rates increased in November by about 4.8 percent to cover increasing costs, Anders said.
Austin has seen rate increases every year for more than a decade, Anders said. In late April, the city manager will present his financial forecast to the council, he said.
“We would anticipate another rate increase coming forward [for the next fiscal year,]” Anders said.
The city has a so-called “conservation rate structure,” Anders said.
“If you use a little bit of water you get charged a lot less than if you use a lot of water,” he said, adding Austin has some of the highest tiered fees in the country.
Current drought restrictions allow residents to water once per week.
“Lake levels are well above thresholds that caused us to go into [current] Stage 2 watering restrictions,” Troxclair said.
AW is working on implementing a permanent once-per-week watering restriction—a change that could go before City Council on May 5.
Another concern for Troxclair is the Pilot Knob affordable housing initiative, which diverted more than $50 million in growth-related fees from AW into a fund for subsidized housing. Her resolution to reconsider the deal passed recently, she said.
Other water providers
Not all Austin residents use AW services. In Southwest Austin, one group aims to challenge a private utility’s rates.
Resident Matt Shepard said he grew concerned about the rates after moving to Avaña in Circle C in 2014. In September, he and his neighbors started a petition related to Mid-Tex Utilities, which provides services for the neighborhood.
“I didn’t expect $400 water bills,” he said. “It got to the point where I’d be at the grocery store and I’d see a neighbor, and the first thing they’d say to me is, ‘Did you get your water bill?’ … Something didn’t seem right.”
Shepard said he and his neighbors aim to speak at a council meeting and submit the petition to the Texas Office of Public Utility Council, the Texas Commission on Environmental Quality, the city of Austin and the Texas attorney general.
The TCEQ granted Mid-Tex a certificate of convenience and necessity, or CCN—a defined service area boundary, said Chuck Profilet, vice president of SouthWest Water Co., the parent company of Mid-Tex. The CCN obligates Mid-Tex to offer utility service within the boundary and prevents other utilities from serving there, he said.
Mid-Tex’s rates are set by the Public Utility Commission of Texas, he said.
To be able to petition the rates, Mid-Tex would have to come before the PUC and ask for a rate increase, Shepard said.
Mid-Tex is not planning to raise rates, and the last time its rates increased was September 2012, Profilet said. Additionally, the utility can only file one such application annually, and since SouthWest filed a rate application for another of its utilities in February, it could not apply again until February 2017, he said.
Gareth Sampson has lived in Austin for 23 years and used AW until November 2014, when he moved to Avaña. He said the neighborhood does not anticipate Mid-Tex will lower rates, but residents want safeguards in place to prevent the rates from increasing again.
Resident Laura Iannelli said she thinks Mid-Tex’s base fees are too high.
“It doesn’t really incentivize the behavior of conservation, and I think that’s what we all would want,” she said.
Additional reporting by Emilie Shaughnessy
