Hutto City Manager Odis Jones has been given the green light by the City Council to explore purchasing a water system that will get Hutto out of a bad contract, officials said.

Residents and businesses will see a 16 percent increase in sewer rates and a 7 percent jump in water rates on Aug. 1. Jones and the council blame a poor contract with the Heart of Texas Water Suppliers L.P. water system for that increase and several more scheduled to follow. Last week, Mayor Doug Gaul in a letter to residents said the city would look at purchasing the system.

The council gave Jones direction to begin negotiations and the ability to execute an agreement not to exceed $63 million. The decision was unanimous and followed an executive session that broke at 11:22 p.m.

Officials said the city has already under-collected $1 million in water charges from users. The anticipated rate increase will match the rates with the current cost to the city.

A study of utility rates exposed the city’s contract issue, which was shared with the public at the April 6 council meeting.

“Purchasing the system will help stabilize the rates,” Jones said. “It’s the right move to look at this.”

Jones said due diligence is likely to last until October.

“There is a series of steps and negotiations are first in that series,” Jones said. “We need to have a stable system with stable rates.”



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