Graham city administrators and elected officials have known they were going to have to raise water rates -- now they know how much. The average Graham water customer uses 4,500 gallons a month and will likely see their bill grow from $26.55 to $31.52, a 18.7 percent increase.
For the same consumption, Wichita Falls residents pay $40, after that city hiked rates 53 percent recently, City Manager David Casteel said.
At 6 p.m. Wednesday night, The Graham City Council met for a budget workshop in which New Generation Strategies and Solutions consultant Chris Eckert presented the study he recently completed to determine new water rates for Graham, a task he has already done for many other Texas cities.
Eckert, who said he’s busier now than he’s ever been in the 10 years he’s done this work, explained that the reason for the increase is simple. Because of the drought and stage 3 water restrictions currently in place, Graham is selling less water than predicted when it set water rates last year.
At the same time, the drought has also caused water treatment costs to rise as low lake levels result in the treatment plant bringing in more organics and dissolved solids, Casteel explained at the city council’s Aug. 14 meeting.
Graham has taken out loans to expand and improve the water plant and has to make a payment against those loans. If the rates remained unchanged, the city would be able to cover operating cost and make the loan payment but could not maintain additional revenue promised to lenders when the city borrowed money. This would affect how much the city would have to pay in interest on any money they borrowed in the future, Eckert explained.
“That is going to determine your cost of borrowing in the future,” he said. “If you come in and you make a promise, and you break that promise. And then you come in and ask for more money later, to the extent you need it, the rating agencies are going to look at that as a broken promise, and they are going to charge you more.”
Councilman Darby Brockway asked if the city was planning to take on more debt.
“That’s an excellent question,” Casteel answered. “If we have to go seek additional water, we’ll have to decide do we want to incur more debt, do we want to realign some of the debt we did incur or what are we going to do.”
The rate increase is structured to have the least impact on minimal, fixed income users, Eckert said, adding that a minimum user in Graham consumes less than 2,000 gallons a month and should expect to see their bill go from $18 to $21.07 for an increase of about 17 percent.
Rates for Graham’s wholesale water customers will see increases, of a lesser extent, as well. While the wholesale minimum charge will remain the same, the volumetric rate will rise from $3.42, per 1,000 gallons, to $3.90, a 14 percent increase.
Read the entire story in the weekend edition of the Graham Leader.