At their next meeting on February 25, League City Council members are expected to consider a proposal to adjust the City’s current water and sewer rates for both residential and commercial customers. The proposed increase is a result of the City’s predicted growth, yearly inflation costs, and nearly $500 million in capital outlay needed to replace and expand water and wastewater related infrastructure throughout the City.
The proposed rates are supported by a recent utility rate study conducted by WellDan, a national recognized water rate consultant. The study’s results revealed a need for League City to increase its current water and wastewater rates in order to maintain financially sound water and sewer systems and to secure a safe and reliable water source for the City’s eventual buildout. Currently League City’s population is 110,000 and is expected to double in the next 30 to 40 years.
In addition to an overall water and sewer rate adjustment, staff is also recommending an adjustment to the monthly rate for commercial meters. The rate adjustment will differentiate residential and commercial customers to better reflect the additional demand commercial customers place on the City’s water and sewer systems.
The last time League City adjusted its utility rates was in 2015. Currently, the City’s residential rates are near the statewide average and are lower than several cities in the surrounding area, including Houston, Galveston, Pearland, Baytown, and Alvin. League City also collects Capital Recovery Fees for Water and Sewer on new homes as well as new commercial developments. The typical single family, new home with a 3/4" meter will pay about $8,000. The fee is paid at the time the home is connected to the City’s water system. .
Under the proposed rate adjustment, the average League City homeowner who uses 7,000 gallons a month would see an approximate 4% annual increase in their monthly water and wastewater bill each year for five years, starting in April 2020 and ending in 2024. The total increase after five years would be 20%. According to research by the American Water Works Association, average utility rates across Texas have been increasing five to six percent each year. AAWA is also forecasting water and wastewater rates across the U.S. to triple in the next 15 years because of inflation, capital improvement costs, and because almost 30 to 40 percent of municipalities are currently not charging rates that cover their costs.
League City’s water and wastewater systems operate as a “citizens’ cooperative” which provides services for nearly 35,000 residential and commercial customers. As part of the cooperative, City staff work to ensure incoming revenue (from customer utility bills) is equal to, or slightly above, the cost of running and maintaining the City’s water and wastewater systems. The proposed rate increase to be considered by Council on February 25 will enable League City to operate the cooperative on a stand-alone basis independent of general fund assistance and will ensure customers are paying only what it costs to provide water and wastewater service. The overall capital improvements to the City’s water and wastewater infrastructure will also improve the quality of service customers receive and provide a well-functioning and financially sound system for future generations.
Members of the public are invited to provide their comments regarding the proposed rate increase at the February 25 Council meeting.