Texas commission sides with Plano, Richardson in water-rate dispute

The Public Utility Commission of Texas voted Feb. 27 to move forward toward a review of the North Texas Municipal Water District’s rate structure for its 13 member cities. (Cassidy Ritter/Community Impact Newspaper)
The Public Utility Commission of Texas voted Feb. 27 to move forward toward a review of the North Texas Municipal Water District’s rate structure for its 13 member cities. (Cassidy Ritter/Community Impact Newspaper)

The Public Utility Commission of Texas voted Feb. 27 to move forward toward a review of the North Texas Municipal Water District’s rate structure for its 13 member cities. (Cassidy Ritter/Community Impact Newspaper)

A state arbiter said the North Texas Municipal Water District’s rate structure was adverse to the public interest, a decision that could have a ripple effect on consumer water bills throughout the growing region.

The Public Utility Commission of Texas voted Feb. 27 to move forward toward a review of the North Texas Municipal Water District’s rate structure for its 13 member cities. That structure had been challenged by the cities of Plano, Richardson, Garland and Mesquite.

Those cities argued that under the existing contract, they have paid hundreds of millions of dollars in recent years for water their residents and businesses did not use.

“We are hopeful that this next step in the process will bring us closer to establishing a new rate methodology that is fair and equitable to all members, encourages conservation and better serves the Region’s long-term interests,” the four cities said Feb. 27 in a joint statement.

The water district’s other nine member cities are Allen, Farmersville, Forney, Frisco, McKinney, Princeton, Rockwall, Royse City and Wylie.


"We are reviewing the Commission's actions but are concerned with its implications," McKinney City Manager Paul Grimes said. "It ignores the long-standing principle of the sanctity of contracts and has wide-reaching implications for water contracts across the state that may increase the amount of litigation of these matters, which only means more cost to our citizens."

Grimes added his city would work with the others to try to address long-term concerns about the water contract.


Tom Kula, the water district's executive director, said NTMWD is open to changes to the current water rate structure, which was adopted by member cities in 1988.

“We’ll also continue our focus on keeping rates as low as possible while addressing the challenges and need for new projects for aging infrastructure, changing regulations and growing communities,” Kula said in a statement.

The state commission is expected to agree on an interim order late next week and vote on a formal order in a future meeting, PUC spokesperson Andrew Barlow said.

“That would then likely move the case into the hands of an administrative law judge at the State Office of Administrative Hearings to begin the process of the rate review,” Barlow said.

The four cities challenging the contract said in a statement that they have paid a combined $275 million in recent years for unused water. Under the existing water contract, each city pays for the amount of water it consumed in its highest-usage year, even if its residents and businesses use less water in subsequent years.

As the water district has raised rates to fund infrastructure expansions in a quickly growing region, cities like Plano have seen payments creep upward as a percentage of their total costs, even as residential water usage has gone down.

In Plano’s case, those city costs are largely passed on to consumers, Plano Budget Director Karen Rhodes-Whitley told Community Impact Newspaper in September.

Before the PUC decision to review rates, Plano had been working on a possible settlement with member cities. But city spokesperson Steve Stoler said these settlement discussions ended without an agreement.

“Our request was made after working for more than a decade to get relief for our ratepayers,” the statement from Plano, Richardson, Garland and Mesquite read. “Due to our lack of bargaining power, all parties remained at an impasse, and our most viable option was to request the PUC review of our rates.”

Frisco City Manager George Purefoy said his city would continue to work with the member cities challenging the contract.

“Hopefully, we will be able to work with all involved to find a fair and equitable solution to the issue," Purefoy said in a statement.

Once the commission adopts a new rate structure for the water district’s member cities, the district will have 90 days to perform a cost study.

“This has been a long process, and we’re committed to doing our part to strengthen partnerships with our cities to serve the needs of our region,” Kula said.

Editor's note: This story has been updated to include a statement from the McKinney city manager.
SHARE THIS STORY
By Daniel Houston

Daniel Houston covers Plano city government, transportation, business and education for Community Impact Newspaper. A Fort Worth native and Baylor University graduate, Daniel reported previously for The Associated Press in Oklahoma City and The Dallas Morning News.


MOST RECENT

Plano ISD has extended its school closure until May 1. (Courtesy Adobe Stock)
School year to end on schedule regardless of length of closure, Plano ISD tells parents

Instruction will still end on the scheduled date of May 22, the district informed parents this week in a mass message.

Medical professionals from Baylor Scott & White Medical Center–Centennial in Frisco received a donation of masks and assorted goodies from Two Men and A Truck on April 3. (Courtesy Two Men and A Truck)
Moving company Two Men and A Truck donate face masks to Frisco, McKinney hospitals

After receiving a gift of more than 100 face masks, the North Dallas-area franchise set up a donation of 50 masks to area Baylor Scott & White hospitals.

The city of Plano has limited access to parking at Arbor Hills Nature Preserve after receiving reports that people were crowding the trails. (Liesbeth Powers/Community Impact Newspaper)
Plano limits parking access at Arbor Hills Nature Preserve to fend off crowds on trails

The move brought the total number of available parking spaces at Arbor Hills Nature Preserve down to 190 after the city received repeated complaints about crowds of people on some city trails.

The American Red Cross is urging people to continue donating blood to avoid any shortages during the COVID-19 outbreak. (Courtesy Adobe Stock)
American Red Cross avoids near-shortage of blood donations, urges donors to keep scheduling appointments

When concerns about the COVID-19 outbreak started to rise to new levels in the nation in March, thousands of blood donors canceled appointments with the American Red Cross.

The Grapevine-Colleyville ISD Health Department has been busy assisting the district with health initiatives, such as delivering meals. (Courtesy Amy Taldo)
ROUNDUP: 5 recent stories on the DFW area’s continued coronavirus response

Read the latest coronavirus updates from communities in the Dallas-Fort Worth area below.

Drivers once lined Legacy Drive during rush hour in the Legacy West mixed-use development in Plano. (Gavin Pugh/Community Impact Newspaper)
Layoffs swift in Plano as small businesses, large developments reel from coronavirus restrictions

Layoffs at Legacy West were the first big wave of Plano job losses reported to the Texas Workforce Commission, but countless businesses in the city have been hit hard by restrictions.

President Donald Trump signed a $2 trillion package March 27 to provide relief during the coronavirus pandemic. (Courtesy Adobe Stock)
Sen. John Cornyn discusses provisions laid out in CARES Act

The $2 trillion package provides funding to help fight the virus and to provide financial assistance for Americans during the pandemic.

Members of the Frisco Downtown Merchants Association have created a daily digital support meeting during the coronavirus pandemic. The group's members are working together to help one another stay in business. (Courtesy Ed Mahoney)
Coronavirus coverage roundup in the Dallas-Fort Worth area

Here are some noteworthy stories from the past week dealing with the impact of the coronavirus.

Initial claims for unemployment insurance rates are increasing across the nation in the midst of COVID-19. (Courtesy Adobe Stock)
Texas sees 77% increase in unemployment insurance claims during week ending March 28

Texas ranked fifth among states in the U.S. with 275,597 initial claims filed the week ending March 28.

Collin, Denton, Dallas and Tarrant counties have a higher response rate than the state of Texas as of Mach 31. (Courtesy Adobe Stock)
Census responses ahead of U.S. in Dallas-Fort Worth, growth highest in nation

Dallas-Fort Worth counties vary in self-response rates on the U.S. census as Census Day arrives April 1.

Gov. Greg Abbott issued an executive order regarding the state's response to the ongoing coronavirus pandemic during a March 31 afternoon press conference. (Screenshot via livestream)
Plano nixes stay-at-home policy discussion in light of Texas governor's guidelines on essential activities

A dash to prepare a stay-at-home ordinance for the city of Plano was halted this week after the governor unveiled his own set of guidelines defining essential services.

Texas Tribune: Some local elections in Texas moving ahead despite coronavirus spread

A handful of towns and special districts still plan to go ahead with their May 2 votes, arranging polling places despite calls from the president on down directing people to stay at home to prevent the spread of the deadly virus.