Many San Marcos residents will pay higher monthly bills for water and wastewater service after City Council voted Sept. 3 to restructure the city's utility rates.

Council members also voted to approve a $166 million operating budget and maintained the city's property tax rate of 53.02 cents per $100 of property value for the 2013–14 fiscal year. In addition, they authorized a 1.3 percent rate hike for electric utility customers.

The decision to raise water utility rates encourages conservation and will help the city increase its water revenues by 4 percent, Assistant City Manager Steve Parker told council members.

"The more water you use, the more water you're going to pay for," Parker said.

A typical residential customer who uses 5,000 gallons of water per month will not experience a rate increase under the new structure, which takes effect Oct. 1. But customers who use 3,000 gallons will see a 5.3 percent monthly increase to $58.14, and customers who use 30,000 gallons will see a 10.4 percent increase to $276, according to a city water and wastewater bill comparison.

Under the previous rate structure, the city's utility customers did not pay for the first 2,000 gallons of water per month because it was built into the minimum monthly charge.

"There really wasn't an incentive to conserve water," Parker said.

2013–14 budget, tax rate

In the 2013–14 budget, the city expects to increase its expenses by about $8.6 million compared to 2012–13. Funding for street maintenance will increase to $1.2 million, and the city will spend $300,000 for sidewalk maintenance and $200,000 for new sidewalks, all areas that San Marcos residents prioritized in recent community surveys.

The city will also hire several new employees, including two downtown police officers and four 9-1-1 emergency communication workers.

San Marcos has not raised its property tax rate of 53.02 cents per $100 of property value for the past six years. However, rising property values mean taxpayers can expect to see their city property taxes increase by about 3.2 percent, according to city documents.

The city's tax rolls grew by $195 million from 2012–13 to 2013–14, Assistant City Manager Steve Parker told council members. Of that amount, $103 million was the result of new development in the city, he added.

Because City Council members are required to vote on the budget twice, they will consider it again Sept. 17.