Extra Costs Amount to $141 Million a Year

by Paul Robbins

 A new report, “Hard to Swallow,” by environmental writer and consumer advocate Paul Robbins has alarming news.  Austin’s water utility has the highest cost per unit of combined water and wastewater of any large Texas city. It is highest in all rate classes, Residential, Commercial, Multifamily, and Industrial.  And it is highest when these rate classes are totaled.  The report also proves that Austin’s costs are higher than the majority of the suburban cities that surround it.

In 2011, Austin’s combined water/wastewater cost per unit (thousand gallons) was 53% higher than the weighted average of these 9 other large cities.  And Austin is 17% higher than the weighted average of the 14 smaller cities that surround it that were surveyed.

Comparing the water/wastewater costs for the other 9 largest Texas cities, the excess cost borne by Austin residences and commercial customers amounted to over $141 million in lost discretionary income and increased business costs in fiscal year 2011.  Comparing the costs of its suburbs, the excess cost to Austinites was $60 million.

This bodes ill for the affordability and competitiveness of the city.  This is especially true since the Austin Water Utility plans to raise its costs by another 19% per person by the year 2016.

“This report adds to the deep concern that Austin is becoming unaffordable for large numbers of its citizens,” said Robbins, who has been researching consumer issues for over 30 years.  “We are in the middle of an electric rate case where bills are proposed to increase by 20% for residential customers and as much as 80% for churches.  In 2011, the average cost of a house purchased in the Austin metropolitan region was among the highest in the state.  And now we learn that Austin’s water costs are the highest of any major city in Texas, are higher than most cities in Central Texas, and that costs are only going to go up.”

“The single biggest reason for these high costs is too much debt,” observed Robbins.  “The utility is spending 52% of its budget per year on debt and cash-funding required by lenders linked to debt.  And similar to Austin’s electric utility, the Austin Water Utility’s “profit,” which goes to support City services, has increased far above inflation over the past decade.”

The report also analyzes the environmental programs run by the water utility.  “Austin spends $18 million on 3 environmental initiatives at advanced levels: water conservation, green power, and land management contributing to water quality.  This increases water utility costs by 4% a year.  As fiscally conservative budget cutters react to this report, I am extremely concerned that they will come after these programs in a short-sighted effort to cut water bills.”

The concept of these programs is to save money and protect the environment. Water conservation protects the region’s water supply from drought.  Green power will guarantee long-term fuel prices for the enormous amount of electricity used by the water utility.  But Robbins observed: “These savings and protections mean little to people looking for a scapegoat.”

The report suggests possible budget savings by selling tracts of land that are no longer needed by the utility, using energy efficiency retrofits to save money on electricity, and capping the General Fund Transfer, similar to what has already been suggested for Austin Energy.  “But until the debt is under control, the economic hemorrhaging will likely continue unabated.”

 Hard to Swallow is available to the public online at: www.environmentaldirectory.info/

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Paul Robbins has been an environmental activist and consumer advocate since 1977. He has written extensively on water and energy issues.  He is the editor of the Austin Environmental Directory, a comprehensive sourcebook of green issues, products, services, and organizations in Central Texas.  The Directory, as well as water report, is online at www.environmentaldirectory.info/