Houston City Council approved a rate increase in a 12-4 vote June 23 and amended the measure to allow the rate to begin Sept. 1 rather than the originally planned July 1 start date.
An analysis commissioned by Houston Public Works found about 60% of households in Houston will see a $5 increase in monthly water bills as a result of the rate change. However, several council members expressed concern that there are too many unknown variables related to Houston's water infrastructure to determine an appropriate rate.
The rate is structured so that any single-family household that uses less than 4,000 gallons of water per month will receive a lower rate than households that use more.
Mayor Sylvester Turner and all present council members except for Council Members Mike Knox, Greg Travis, Michael Kubosh and Amy Peck, voted in support of the measure. Council Member Letitia Plummer was absent.
Municipalities in Texas are required to study their utility rates every five years, Samir Solanki, Houston Public Works chief financial officer, told a council committee in April. The city adopted a new rate in 2010 but did not adopt a new one after its 2015 rate study. Gov. Greg Abbott extended the 2020 deadline for utility rate studies by one year because of the COVID-19 pandemic. The city does, however, adjust water rates in smaller increments each April, according to the city charter.
The rate adjustment, Turner said, is necessary because Houston City Council has not adjusted the water rate since 2010 and because the city needs to fund infrastructure improvements required by a federal consent decree. The decree, approved by a federal judge April 2, requires the city of Houston to spend $2 billion over the next 15 years repairing persistent wastewater overflow issues that violate the Federal Clean Water Act.
“When I came into office, I said I was not going to pass issues onto the next mayor,” Mayor Sylvester Turner said. “This one was passed to me.”
The city cannot legally collect more revenue from the rates than is necessary to cover the costs of Houston Public Works' operations, City Attorney Arturo Michel said.
“We cannot impose a fee greater than our expenses,” he said of the legality of the rate hike.
Peck, who voted against the rate increase, proposed using the city’s American Rescue Act funds, which are allocated by the federal government for budget shortfalls caused by the COVID-19 pandemic, to pay for the infrastructure improvements. Doing so, she said, would give the city time to find out if it will receive any additional funding from a potential federal infrastructure bill proposed by President Joe Biden.
“I want to see the full picture so I can I understand what I'm voting on," Peck said. "I know we might not get $2 billion, but even if we get some money, we don't have to increase the rate as much."
Turner said, however, the ARA funds are needed in several departments, and the infrastructure bill is too far from approval to rely on.
He said he supported the rate change because it maintains a debit-to-credit ratio that helps the city maintain a favorable bond rating. He also referred to a water main break in February 2020, the consent decree and damage caused by Winter Storm Uri as his reasoning for supporting the rate change.
“When the East Houston leak took place ... they discovered that pipes had crumbled, and people were out of water for several days,” Turner said. “The infrastructure needs in this city are real.”