Pflugerville residents who have been waiting for more than a year to see if their water bills would rise more than 60 percent got their answer Tuesday: Rates will stay the same, for now.

The Pflugerville City Council unanimously approved an agreement with SouthWest Water Co. at the April 10 meeting that, in effect, freezes rates for a period of 12 months.

"The rate increase is dead," Mayor Jeff Coleman said. "You will not, as Windermere Utility customers, experience a rate increase."

SouthWest is the parent company of Monarch Utilities and Windermere Utility Co., and supplies water to about 5,000 Pflugerville customer accounts, representing about 15,000 residents, or nearly one-third of the city's population.

"Ultimately the goal is to find a way for you to have a better product, to have better, higher-quality water, hopefully at a better price. We probably weren't going to get there with swords drawn," Coleman said. "If we did get there, it was going to be a half-decade away and would be extraordinarily expensive for both sides."

The agreement

The agreement calls for SouthWest to withdraw its application to merge Windermere Utility Co. with six other water companies throughout the state, not seek any rate increase for 12 months and to waive any other new miscellaneous fees for the same period of time.

Chuck Profilet, vice president of SouthWest, said the company was pleased with the agreement and has no plans to raise rates in the period immediately after the 12 month period is up.

In return, Pflugerville will pay SouthWest $176,752 and agree not to institute condemnation proceedings for 12 months. The city will also extend its contract to sell wholesale water to the company for a year.

The yearlong reprieve will allow SouthWest and the city to negotiate a solution during that period without "lawyers with knives at each other's throats," Pflugerville City Manager Brandon Wade said.

"The downside is that if we don't come to an agreement, we could be right back where we started," Wade said. "Hopefully it will get us to a solution."

That solution, in Wade's mind, will hopefully include some kind of private-public partnership, he said, adding that either way, the reprieve is good for the city.

"I think, at this point, it certainly is a win for Pflugerville," Wade said.

Profilet said the company had already signed the agreement, and it would go into effect as soon as the documents with Wade's signatures were delivered.

Reaction

Several residents who spoke took issue with the agreement as too lenient.

Those who spoke out against the agreement said they had hoped Pflugerville would take over the water utility and provide more immediate relief to water rates that are already higher than other providers in Pflugerville.

"I'm kind of disappointed that with all the fire you had behind you, you're going to cut a check to SouthWest water. What do they have to lose?" resident Reanna Garza said.

Many residents were visibly angry and called for SouthWest to leave the community entirely.

"We want them out, and the longer you sit up there and go through this process and wait and see we're suffering. We want them out period," resident Joeseph Linen said.

When asked directly if the company would sell the Windermere utility to Pflugerville, Profilet did not dismiss the idea.

"Everything is on the table. I will take that back to the board and discuss it," he said.

Background

The agreement comes six weeks after the council approved a resolution authorizing city staff to take steps to fight a water rate increase and address water quality issues, including the use of eminent domain by the City of Pflugerville to acquire the water system.

"Your council is bound and determined to do anything it can do, up to and including fighting the fight and condemning Windermere water if that's what it comes down to," Coleman said at a Feb. 28 City Council meeting.

Coleman said the utility company had approached the city with a settlement offer to accept a smaller rate increase prior to the Feb. 28 meeting. The council ultimately decided to reject the agreement, Coleman said, because they were concerned that the merger would cede control of prices further down the line.

Monarch Utilities filed a transfer application with the Texas Commission on Environmental Quality in February 2011 to merge Windermere with six other water utility companies in Texas. The company then filed a rate increase application the following month. Pflugerville made moves to halt the increase in August, eventually denying it in November.

Monarch appealed that decision to TCEQ, but that appeal will be withdrawn as part of this agreement.

Profilet said this agreement restarts the merger proceedings for the other six water utilities as well, as Windermere's 5,000 customers represented roughly half of the customers in the seven companies.