The San Jacinto River Authority will likely not increase its water rates for next fiscal year, pending final approval from its board of directors. The current groundwater pumpage fee is $2.73 per 1,000 gallons, and the current surface water fee is $3.15 per 1,000 gallons.
On June 22, the SJRA groundwater reduction plan committee approved a budget and rate order for FY 2020-21 that includes no rate increases. The rate item will be presented to the SJRA board of directors June 25. The budget will be considered by the board of directors Aug. 25.
However, this was not the rate scenario the GRP committee had planned for in the first quarter of this year, and SJRA officials are concerned about the financial hit of not raising rates. Because the SJRA is not raising its rates, it will need to pull from its debt service fund to pay for increasing legal fees, SJRA Deputy General Manager Ron Kelling said.
“It’s not free money,” Kelling said June 22. “There’s consequences.”
The GRP committee had originally outlined rate increases that ranged from 0.4% to 14.5%. The rate increases were based on the outcomes of legal scenarios, including lawsuits from the cities of Conroe and Montgomery. Legal fees, plus shortcomings by Conroe and Montgomery as they refuse to pay the full rates, are driving up SJRA water rates.
But at a May 13 meeting, officials with The Woodlands Water Agency— the managing body for the 11 municipal utility districts in The Woodlands—said they would no longer foot the cost for legal fees or shortcomings by other entities. The agency directed its GRP representative to vote for a rate order that does not include legal fees or uncollected revenue from Conroe and Magnolia.
The GRP committee heeded The Woodlands Water Agency’s request, and the rate order only covers operations and maintenance costs.
If the SJRA does not raise its rates, it will need to dip into its debt service reserve fund. At some point, the entity will need to replenish this fund either through rate increases or funds awarded by the court required of Conroe and Magnolia, Kelling said.
“We’re keeping it flat this year, but at some point in time in the future there has to be a catch-up,” he said.