City of Marfa hears water and wastewater rate study, considers new rate plan

MARFA — At Tuesday evening’s regular City Council meeting, council members heard the results of a commissioned water and wastewater rate study, which presented three potential options for the city’s rate structure — two of which suggest rate increase, and a third which suggests a new rate structure altogether. 

Jason Gray of Willdan Financial Services, after presenting the options, was ultimately asked to return with more concrete numbers so that Council can vote on a plan in time to finalize the city’s budget for fiscal year 2022-23. 

The city’s water and wastewater utility rates have not increased since 2015, according to City Manager Mandy Roane — rate increases are being suggested now in order to cover cost of service and capital improvement projects over the next five years, which could include a new water storage tank and extending city services to the East Heights neighborhood.

The first option presented would entail a $7.5 debt issuance for 2023, and would raise rates by 5% to 6% annually in order to cover operational cost increases. If capital improvement projects or operations change, rates may be adjusted accordingly. The city would be presented with a five-year rate plan, but would have the option of adjusting annually. 

The second option would raise rates 8% for the first five years, but would then gradually decrease to a 3% increase, and would also include $100,000 annually for a vehicle and equipment replacement fund. That fund could be any amount, but Willdan anticipates $100,000 will be the necessary amount.

The third option — a “meter equivalency rate plan” — suggests a model for determining rates based on meter size. Under the city’s current rate structure, said Gray, meter size is not taken into account — but larger meters have a great impact on the water or wastewater system and require more storage. 

“All of your base charges for your meter charges are the same, and what that doesn’t do is, it doesn’t recognize the differential impact of a 5/8-inch meter — which is your common residential meter — versus a 2-inch meter or a 3-inch meter, and the reality is those larger meters have a much larger impact on your system as a total,” said Gray.

Council expressed interest in a plan that would restructure the base rates for larger meters but also include a vehicle and equipment replacement fund — Gray said he would return with specific rate numbers for that plan within a few days, in time for the finalizing of the city budget. 

“No decision was made, but there is interest in seeing all available options going forward,” said Mayor Manny Baeza afterwards, noting that council members Mark Cash and Eddie Pallarez were absent on Tuesday and so unable to hear the plans.