City sets new tax, water rates

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Pearland city leaders on Monday again took up the complex topic of new water and wastewater rates after adopting a tax rate for the coming year.

Adopted Monday was a tax rate of 68.12 cents, which is lower than the current year’s rate, but above the effective rate.

Residents who spoke Monday were not pleased.

Resident Richard Sharp commented: “Apparently there is enough discretionary cash flow for somebody to go out and buy securities from Wells Fargo.

“We could use some of that money to get us out of the hole we’re in, and how we’re increasing our tax rate,” he said. “If I don’t have extra money to invest, I have to spend that money on things I need to spend it on, like my water bill.”

City Manager Clay Pearson responded the city’s procedures are normal and prudent and the city has a strict investment policy.

“Most of it is very short term: CDs is one of those liquid investments we invest in on a regular basis,” he said. “You can’t just take money from an investment pool and say, ‘Today we will do sidewalks,’ it just doesn’t work that way. We have a minimum reserve fund for emergencies and disasters. The city also has revenue that is elastic for sales tax. As that ebbs and flows we have to have reserves we can keep operations going.”

“Some of these things look bad on the surface, but when you look at the (state) requirements, we don’t have a choice,” Councilman Trent Perez said.

Councilman Keith Ordeneaux urged residents to attend early budget workshops so that concerns could be addressed early.

“This is a four to six month process – maybe 5 people showed up at those workshops where we discussed these items all day,” he said. “This isn’t a 3-week process. We’re running a very large organization. It’s something we should spend time on.”

The city’s 2016-17 budget passed the council 4-2 Monday, with Councilman Tony Carbone and Derrick Reed voting against.

Council on Monday heard the first and only reading of the new water rates schedule. One reading was given in order to pass the budget before the new fiscal year begins in October. The new fees go into effect on Oct. 1.

An original water rate plan was postponed last week when a number of commercial customers spoke against the schedule, saying it heavily supplements residential customers on the backs of businesses.

“I would like to see a scenario where we keep residents flat and add the difference to the commercial side,” Councilman Tony Moore commented.

According to city documents, 92 percent of water customers are residential – using smaller sized meters, described as 5/8 inch or 3/4 inch, and accounting for about 67 percent of water usage. Under the new rates, base rates are calculated on the capacity of customer meters, charging a higher rate for a larger-sized water meter.

Assistant city manager Trent Epperson said the new structure is not, in fact, “subsidizing” as has been described.

“The new proposed rate structure, to have the base rate established by meter size, more accurately reflects the impacts on the different meter sizes on the system,” he told the council.

Two options were presented to council Monday, and council members agreeing on Option 2, which holds the base rate for smaller meters the same (instead of decreasing it as originally planned), and increases the multi-family base rate to equal the 5/8-inch and 3/4-inch meter rate.

According to the city, the typical residential customer has a 5/8-inch meter. Under Option 1, those customers would have paid $12.63 base water charge, and under Option 2, they pay $13.78 – the same as in the past year.

Councilman Carbone said he felt Option 2 was more “fair,” and others agreed.

“It’s a more equitable approach and it spreads it out more between commercial and residential,” Councilman Greg Hill said.

Story by Nicole Jones

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