AUSTIN (AP) –Austin residents may become victims of their own success at conserving water as city officials now are considering raising water rates to ensure the system remains in the black.
Residents aren’t buying enough water to allow the Austin Water Utility to generate ample revenue.
The utility sustained a $10 million loss in water sales in the first few months of this fiscal year. It recorded a $27 million loss in sales last fiscal year.
Correcting the shortfall could require higher “drought rates,” officials say, and a new rate structure could be proposed this summer. One idea is to have rates rise as the lakes that supply Austin’s water shrivel, a concept similar to one Dallas has adopted.
Utility Director Greg Meszaros said it is possible rates could increase by double digits. The utility also may continue with internal cuts, he said.
Rates must increase to ensure the utility can cover the 80 percent of costs that are fixed, such as debt payments and equipment maintenance, according to officials.
“For a customer it can be counterintuitive” that water conservation causes higher rates, Meszaros said. “But as we reduce water demand we reduce revenue, and a lot of the costs of our operation cannot be cut. We’re just not built to absorb $27 million in losses year after year.”
Austin has been steadily raising rates for more than a decade to pay off major investments, such as a $400 million upgrade of the sewer system that was federally mandated. Other cities across Texas have raised rates significantly as the drought deepened.
Largely because of conservation efforts, Austin homes and businesses have used less water each year since 2006, despite population growth and the lingering drought. A primary reason for the reduction is a rule that watering can be done only once a week.
“It used to be that in dry years, water utility revenues would go up, and in wet years it would go down. It’s still down in wet years, but now it also is down in dry years,” said Daryl Slusher, an assistant director of the water utility who oversees its conservation efforts.
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