A “typical” Hutto resident will see a $15 increase to their wastewater utility bill beginning in February, according to a solutions firm hired by the city of Hutto to analyze the city's wastewater utility fund.
NewGen Strategies and Solutions, contracted by the city of Hutto, said in its report that the city has lagged behind in raising its wastewater utility fees and recommended raising the fee amount by 25 percent per year until fiscal year 2020, in addition to instituting a recurring $4 drainage fee.
Instead, Hutto City Manager Odis Jones requested Thursday night that city council members approve just the first year of fee hikes and the drainage fee.
“It gives us breathing room for us to get through the next year,” Jones told council members.
That hike would result in an estimated $15.39 total monthly increase to a “typical” resident’s utility bill, according to NewGen Strategies.
City council approved the wastewater fee increases for fiscal year 2018 Thursday night with a mandate that the fees come back to council for review in January 2019. No new water rate fee increases were proposed or passed.
In its report, NewGen Strategies identified a “declining financial performance” in the utility fund, alleging rates are not keeping up with costs. NewGen projected the city would lose $4.1 million annually by 2019 with its existing rate structure, with the fund balance going into the red by 2020.
According to Jones, problems with the wastewater utility fund began to accumulate shortly after the city of Hutto borrowed $24 million in 2014 to build the new Hutto South Waste Water Treatment Plant with no increases in fees planned to pay back the debt.
“This has been draining the utility fund because there was never a rate structure built into that debt,” Jones said.
Hutto Chief Financial Officer Michel Sorrell told council members that the city experienced a wastewater rate hike in June 2017, but that she had found no evidence of a rate hike prior to that since at least 2013.
Records show Hutto city council vote to raise the water and wastewater utility rates by 5 percent in September 2015. At the time, the increase was estimated to generate $388,000 of revenue for the utility fund.
Thursday's rate hikes represent a 25 percent increase to the existing wastewater rates and go into effect immediately. Hutto residents can expect to see this increase reflected in their February utility bills.