Little Elm Journal > News
Oak Point agrees to Monarch water rate increase settlement
The Coalition of Cities, the Texas Commission on Environmental Quality executive director, the Office of Public Interest Counsel, and stakeholders have reached a settlement agreement with Monarch Utilities, a subsidiary company of SouthWest Water Company, concerning the water and sewer rate increase originally filed by the water company in May 2011.
In a press release from Monarch, the Coalition of Cities (made up of Blue Mound, Buda, Ivanhoe, and Kyle); TAMER, an organization against water/sewer service providers that charge excessive rates; Denton Creek Estates and Monarch have agreed to a water revenue increase of 8.7 percent effective June 1 and an increase of 4.2 percent effective January 2013. The Oak Point City Council approved the water rate increase for the Crescent Oaks subdivision on May 21 at a regular meeting, which will begin on July 1.
"Obviously, nobody likes a rate increase, but based on the input we received from our attorney [and] consultants the position is [what] the Coalition of Cities took," said Doug Mousel, Oak Point city manager. "I think we can feel pretty good at were we arrived at."
In the agreement, consumers will not pay for another water or sewer rate increase before January 2014. A sewer rate increase that was originally requested last year, which would not affect the subdivision, was not included in the agreement. According to the release, Monarch is entitled by law to "recover the company's rate case expense from customers, but the company agreed to forego these charges."
"Over the past months, we have listened to our customers' concerns about the rate increase and the economic impact on them," said Charles Profilet, vice president of SouthWest Water Company, in the release. "We are pleased to reach an agreement that meets customers' needs while allowing the company to continue to provide the highest quality water and wastewater services."
Mousel said he wouldn't call the agreement a victory, but he sees it as fair based on the information submitted by Monarch and the city's consultants. Originally, Monarch had filed for a water rate increase of 62.3 percent and a sewer rate increase of 33.6 percent for the consolidated utilities in May 2011. The Oak Point City Council had unanimously denied the water and sewer rate increase application by Monarch Utilities at a public hearing in November 2011.
The council had suspended action on the increase application in August 2011 for 90 days to allow the city to analyze and investigate the request and provide public comment. In November, those proceedings for Monarch's rate increase application were stopped and interim rates were set to the previous rates before the increase as State Office Administrative Hearings judges focused on the Sale Transfer Merger application filed in February 2011 by Monarch. The STM application was to consolidate seven utilities into Monarch.
In April, Monarch withdrew the STM application and filed a motion to request permission to amend its current rate application for a 14.3 percent water revenue increase and no sewer revenue increase without the consolidated utilities.
"The agreement provides for less of an increase in water revenues than requested in the amended application," read the release.
The City of Oak Point has incurred over $20,000 in legal fees and consultant fees to fight the rate increase with TAMER and the Coalition of Cities.
"Obviously $20,000 is a lot of money, but you really have to go through the motions to get to the end point. Unfortunately that's the way the state of Texas is set up, the water rate process," Mousel said. "I wouldn't change anything we've done."
Mousel felt that the council was between a rock and hard place in passing the rate increase agreement, but felt the need to approve the item.
"Nobody wants a rate increase, but considering the terms of the settlement and the process that we're up against, I think it was the right thing to do," Mousel said.