Bellaire utility users could possibly begin seeing new rates on their bills by the fall if suggestions from a comprehensive utility rate study and financial plan get approved by City Council by the end of summer.

What happened

With the 6-1 vote on Jan. 22, Bellaire City Council approved amending a sector of the city's fiscal year 2023-24 budget by at least $22,000 to fund the full cost of a comprehensive study that will analyze how the city handles, manages and charges its utility rates.

City Council awarded the project to the firm Willdan Financial Services. The project could span at least six months until completion, assuming the project begins in March, according to the firm's proposal document. The firm will:

  • Collect data and assess Bellaire's water, wastewater, solid waste and stormwater drainage services
  • Project annual costs over the next five years
  • Propose utility rates that will generate the required revenue
  • Present the study results to city staff, City Council members and those who will be subject to the possible new utility rates during a public hearing
  • The final meeting to vote for or against the possible new utility rate plan will be held at a future City Council date.

What residents should know

In addition to Bellaire's existing utility rates, the study will examine the addition of a new stormwater drainage fee.

  • If approved by council later in the year, the additional stormwater drainage fee will be used as a steady revenue stream for maintenance, rehabilitation and improvements of Bellaire's immediate and long-term drainage needs, according to agenda documents.
  • The study will provide council with information on whether to implement the new fee as part of next year's budget adoption process.

Council member Ross Gordon said a stormwater utility fee gives the city the ability to create a dedicated funding source for regular upkeep of an essential service.

"I think the key piece that we're looking at here is a question of how do we raise funding in the most appropriate, equitable and reliable manner," Gordon said.

The cost

Initially, city staff estimated the study would cost approximately $35,000. That amount was included in the FY 2023-24 budget but did not take into account the study's stormwater drainage services, and it underestimated inflation, according to agenda documents.

The firm handling the project proposed a cost of $57,010, which exceeded the city's original budgeted amount of $35,000, resulting in a request to amend the budget by $22,010 from unappropriated funds. City Manager Sharon Citino said the overall cost of this study was based on the value it brings to the city.

"We don't profit from them. This is strictly a cost of service, and the only way to truly know where our cost of service is, is to periodically do these studies from time to time," Citino said.

The big picture

While these studies are performed every three to five years, the purpose of the utility cost-of-service and rate study will provide data analysis that takes into consideration if service providers are charging fair and equitable rates, according to agenda documents. The last time Bellaire officials contracted a utility study was in 2016.