Public Statement against Austin Water Utilities Rate Hike – Public Hearing

Below is the text from the public statement I made at the public hearing on Austin Water Utility's rate hike held on Thursday, August 26th:

Thank you members of Council for allowing me to speak this afternoon. My name is Eric Deal, and I am here to speak as a citizen of Austin.

First, I would like to applaud Austin Water Utilities for their efforts to promote conservation through their WaterWise and WaterIQ programs, their continued support for the rainbarrel rebates, and especially for the new landscape conversion rebate, which directly addresses the issue of peak water demand.

I would like to ask the Council to reject the proposed water rate hike for this year. Incremental rate hikes of $4 per month may not seem like much, but when they occur in several consecutive years, the effect is alarming and begs the question of whether AWU is truly acting as good stewards of both our money and natural resources. Using AWU’s typical customer averages, combined water/wastewater bills for residential users have increased by 45% over the past 5 years, from $612 per year in 2005 to a proposed $893 per year in 2010. This is a cost difference of $281 per year for the same service we received 5 years ago. While it is admirable that AWU works to help lower-income families with their water bills, ALL Austin residents are adversely impacted by this rate increase, and in these economic times, budgets should be held steady, not increased. Inflation certainly does not explain these rate increases, and I could only wish my income would have increased at this rate over the past 5 years.

Yet, even with these rate increases, AWU is seeing a revenue shortfall of between $30M and $40M for the current fiscal year. In fact, the proposed rate increase for this year only covers 1/3 of the revenue shortfall in next year’s budget. According to Mr. Meszaros at the AWU briefing yesterday, the primary reason for this shortfall is that potable water sales have fallen by about 25% from projections, and AWU is placing the cause on our wetter than average year. In actuality, rainfall totals for 2010 are within 5% of historical 30-year averages and the current year only seems wet compared to our drought years of 2008 and 2009.

The real cause of the shortfall is that Austin Water Utilities expenditures have gotten out of line with the needs of Austin. Nationwide, there has been an increasing awareness of the scarcity of natural resources such as energy and water, and conservation efforts by the City of Austin as well as individual residents are reducing water usage. Seeing Lake Travis at 40% capacity last summer provided a further wake-up call to Austin residents that Lake Travis is not an infinite water source. Furthermore, rate hikes over the past 5 years as well as those proposed for the next 5 years to cover the $1.2B in financing for WTP4 will only further punish ratepayers with higher water rates.

It is time for AWU to adjust its spending to meet the realities of today’s world, not that of 1984. Citizens are fed up with ballooning city and national debt as well as with elected representatives who insist on following through with controversial decisions based on outdated data at the expense of litigation and potentially adverse environmental and community impact. We demand that our governments act in an financially responsible manner. AWU does not currently have a rate structure that matches its expenditures, thus Austin must re-evaluate the need for additional treatment capacity in light of the conservation measures that have been enacted over the past few years. To not do so is financially irresponsible and will commit Austin ratepayers to years of paying for an unnecessary treatment plant constructed at twice the price of alternatives.

AWU and the City Council continue to act on a belief that building WTP4 is the answer to all of our water concerns. In reality, the only long-term solution is to appropriately manage this valuable natural resource. Austinites are realizing that conservation is the only way to ensure we have the water supply we need in years to come. When will AWU decide to act on that same reality?

I would like to also paraphrase a comment made by Mr. Meszaros [head of AWU] from the April meeting at Concordia. When asked about the $25M revenue shortfall at the time, he replied "I don't mind a $25M deficit when Lake Travis is full." The implication is that water sales, not sustainable resource management, is AWU's priority.

In summary, I ask the council to reject the water rate increase, and require Austin Water Utilities to reign in expenditures to meet their existing revenue stream. Defer further expenses for Water Treatment Plant 4 until the effects of conservation can be determined.

Thank you.