Enormous Woodlands water rates to increase by almost 5% as a result of less usage

Enormous Woodlands water rates to increase by almost 5% as a result of less usage

Image: In the most pleasant and kindhearted tone, San Jacinto River Authority General Manager Ron Kelling unleashed the news that Woodlands water rates, which are already massive, will shoot almost 5% higher beginning Fiscal Year 2020.

The Woodlands and Conroe, June 28 – The San Jacinto River Authority (SJRA) intends to increase water rates in The Woodlands by almost five percent (5%) beginning September 1, 2019, as long as the Municipal Utility Districts (MUDs) go along with the proposal. Every indication is that the MUDs, largely under the control of the Woodlands Joint Powers Agency (WJPA), whose President is Jim Stinson, a close ally of SJRA, will approve the water rate increases at their August Board meetings.

The eleven MUDs in The Woodlands each have a separate Board of Directors, whom citizens, in extraordinarily light turnout elections, choose to represent them. Developer interests continue to dominate the MUD Boards. The MUD Boards will each instruct their individuals Trustee representatives on the Board of Trustees of WJPA how to vote. To this date in history, the MUDs have all charged the same water rates and have voted as a bloc to set water rates in The Woodlands together.

In order to understand water rates in The Woodlands, it’s important to examine a water bill.

Back side of a typical water bill in The Woodlands.

The Base Charge water rate is what a MUD charges a customer as a retail price for water per 1,000 gallons. As shown on this bill, the pricing is $5.00 per 1,000 gallons as a base with different and additional rates depending upon the additional water usage.

The Base Charge and additional rates for water shown in the top half of the above Rate table includes the so-called Wholesale Water Rate, which the Woodlands Division of the SJRA charges to the MUDs, plus whatever retail markup the MUDs add to those rates.

Additionally, there is an interesting charge referred to on the water bill as the “SWC Fee,” which is essentially a regulatory surcharge added to everyone’s water bills payable to the SJRA. The SWC Fee is also known as the Blended GRP Rate or Groundwater Reduction Program rate, which SJRA assesses and collects as part of the GRP program SJRA established along with the Lone Star Groundwater Conservation District to force a thirty percent (30%) reduction in groundwater pump age throughout Montgomery County. The current GRP Rate is $2.74 per 1,000 gallons. The SWC Fee contains a $0.02 per 1,000 gallons markup.

SJRA delivered the good news of the water rate increases to the Woodlands Township Board of Directors

On Wednesday, June 26, 2019, SJRA’s Deputy General Manager Ron Kelling delivered the news of the water rate increase to the Woodlands Township Board of Directors in the most pleasant and kindhearted tone. It was downright jovial.

Kelling explained to the Board that SJRA’s Woodlands Division provides wholesale delivery of water to the Woodlands MUDs in an arrangement which real estate developer George Mitchell and his company, The Woodlands Corporation, originally established.

In part, SJRA has examined the capital needs for the approximately six thousand (6,000) water assets of SJRA in The Woodlands, which include meters, water lines, and related pumping and production equipment. SJRA has developed a Ten Year Project Plan – with descriptions, budgets, and fund mechanisms – to pay, through a Repair and Replacement Fund (“R&R Fund”), all of the capital needs of the water system in The Woodlands. The R&R Fund balance will be $7.8 million by September 1, 2019. Throughout the coming fiscal year, which begins September 1, 2019, SJRA will transfer an additional $4.7 million into that fund, and spend $9.9 million on capital projects, leaving an end-of-year fund balance of $2.6 million on August 31, 2020.

Kelling told the Township Board that the primary driving force for higher water prices in The Woodlands is a substantial downward trend in water and sewer usage, partly due to weather and partly due to water conservation efforts. Citizens in The Woodlands will enjoy the reward of successful conservation in the form of a trophy of higher water prices.

Kelling told the Township Board that the primary driving force for higher water prices in The Woodlands is a substantial downward trend in water and sewer usage, partly due to weather and partly due to water conservation efforts. Citizens in The Woodlands will enjoy the reward of successful conservation in the form of a trophy of higher water prices.

The following are some of the slides SJRA’s Kelling presented to the Woodlands Township Board. They’re pretty self-explanatory.

SJRA’s “Key Budget Elements” presented on June 26, 2019, to the Woodlands Township.

Kelling noted that water prices in The Woodlands have remained the same since 2016. In the Woodlands Division of SJRA, Kelling contended that they’ve tried to reduce expenses and even reduced staffing by 0.75 employees, although they are providing a 4% increase in salaries as part of the proposed budget.

SJRA has shown the water demand is actually declining substantially, while sewer water usage has remained constant.
SJRA is blaming others for higher water prices.

Interestingly, SJRA is blaming the Lone Star Groundwater Conservation District (“LSGCD”), among others, for the higher water prices. That doesn’t make much sense. SJRA’s General Manager Jace Houston was an LSGCD Board member until November 13, 2018, when the newly-elected Board came into office. SJRA’s Houston largely controlled the direction of the LSGCD Board until that time. The new Board came into office claiming that they would seek to deregulate groundwater production, which, of course, would reduce water prices, not increase them. Although the new Board seems to be moving very, very, very slowly – and largely in secret – they have made some changes in regulations, even if they haven’t impacted actual groundwater regulation reductions at all so far.

SJRA’s pie chart showing its Woodlands Division expenses.
Wholesale water rates and SJRA’s proposed increases for The Woodlands.

The 4.5% increase in the wholesale water rates will impact a portion of the base charges on the water bills of citizens in The Woodlands.

GRP rate increase, which SJRA’s GRP Division is also imposing.

Kelling noted briefly that the Groundwater Reduction Plan Division of SJRA, which charges an enormous surcharge per 1,000 gallons of water use, will increase by 5.1% for all water users in Montgomery County who purchase water from any of the 80 GRP Plan participants, who include The Woodlands, the City of Conroe, and the City of Magnolia, among most other large water providers throughout Montgomery County.

This regulatory-induced surcharge is a relict of previous regulations of LSGCD, which SJRA and its LSGCD Board allies, caused LSGCD to impose. Those GRP Rates have resulted in enormous cash surpluses for SJRA and caused water prices to soar throughout Montgomery County. As Kelling and SJRA describe the GRP Rate, it’s a “pass-through rate.”

In The Woodlands, it’s important to note that the MUDs not only take money from taxpayers through water fees. Additionally, the MUDs assess property taxes.

In early August, 2019, the eleven Woodlands MUDs will vote whether or not to accept these massive increases, or whether to fight back.

 

Comments

comments

You must be logged in to post a comment Login