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Copperas Cove city council directs staff to look into utility rate study

By BRITTANY FHOLER
Cove Leader-Press 

The Copperas Cove City Council discussed future water and sewer fund projects and directed city staff to look into a rate study to focus on how to fund those projects during their workshop meeting held Tuesday evening. 
Budget Director Ariana Beckman presented council members with the Fiscal Year 2023-2027 Capital Improvement Plan to gain direction from city council on which projects were a priority and which projects should be funded using debt service. 
City council had previously directed staff to keep the city’s debt limit under $8 million per year or between $36 million and $40 million over a five-year period. The Capital Improvement Plan is a five-year plan. The FY 2023-2027 CIP summary showed a total of nearly $70.6 million worth of CIP projects, for the public safety, transportation, street and sidewalk, fleet, parks and recreation, administration (municipal court and library), water and sewer administration, utility administration, water distribution, sewer, wastewater, solid waste, golf course and drainage categories. 
Some of these projects are proposed to be funded using operating funds and not bonds, such as the $1.58 million worth of solid waste projects or the $1.47 million worth of drainage projects, both scheduled for fiscal year 2023. 
When discussing which could be used for bonds, Haverlah explained that there is a greater cost to the city with General Obligation bonds due to having to hold an election because these types of bonds require voter approval. 
Haverlah added that water and sewer funded projects are revenue-supported projects which would not have a tax rate impact. 
“All the water and sewer projects are paid for by the rates we as customers pay for that service, water and the treatment of sewer and the same thing with solid waste,” Haverlah said. “Putting that as a GO bond, you do generate the community support for and identify what that support level is, but the projects that we have listed on here are projects that if we don’t complete them now, we’re either going to put ourselves in an emergency situation of doing it without the necessary resources immediately available, or it puts us into a position of potentially being out of compliance and again, forces us to do that with the additional restrictions on top of that.” 
If the item fails, there is also a rule that municipalities cannot obtain any bond for the item for a period of three years. 
Haverlah said that city has been reviewing rates for water and sewer services over the last several years using the spreadsheet created by himself and Beckman that has been “useful to council” when seeing what rate increases looked like and how they impacted the fund and the bills to customers in a fairly accurate way. 
However, the spreadsheet doesn’t take into account the long-term planning that is necessary, he said. 
“We’ve got a lot of things on the horizon, and they’re big capital projects, and so my recommendation to the council is that you authorize us to pursue a rate study,” Haverlah said. “There are a number of rate studies that we have completed as a community in the past, and typically those rate studies have met fierce criticism to basically being ignored over the last two decades, so it would be my purpose that if City Council authorizes us to proceed with a rate study that we’d be highly critical in selection of the firm that would do that rate study, to meet all of the objectives and needs that council has with the current form that we are using, taking per council to make decisions on rates, but also to have that long term outlook and the ability to explain to our customers, this is why rates are changing with this specific information.”
Haverlah said he felt the projects should remain on the long-range debt schedule, with the promise of completing a utility rate study to allow council to make decisions on the rates and then know when the projects can be completed. 
With consensus from council members, Haverlah also touched on a previous discussion regarding looking into switching to a tiered water rate for residents. The council had last discussed the item in October, one year after the previous rate changes went into effect. 
Haverlah said that with the utility capital improvement projects and the impact from water treatment capacity changes that will affect utility rates, he was concerned about introducing new utility rates before the city is able to do a true utility rate study. He added that a utility rate study can show a new utility rate structure and provide the city council with an idea of what it would look like for them to make their decision. 

Copperas Cove Leader Press

2210 U.S. 190
Copperas Cove, TX 76522
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