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Agua SUD prepares to set sewer rates for Palmview

The Agua Special Utility District plans to start billing Palmview customers for sewer service next year.

First, though, the utility district must set sewer rates — and the projected monthly bill could leave Palmview customers with sticker shock.

aguasudSewer service could add nearly $42 to the monthly utility bill for Palmview customers, according to an analysis prepared in July 2015. That analysis remains accurate, said Interim General Manager Jose E. “Eddie” Saenz.

“It’s all going to depend on how this last bid comes in,” Saenz said, referring to the final phase of the sewer project.

Before the utility district broke ground in Palmview, the board hired financial advisers with First Southwest to analyze the funding plan.

The Texas Water Development Board funded the $42.2 million sewer project with a major grant and three loans.

With the money, the utility district planned to install sewer pipes, build a lift station and partially cover the costs of expanding a wastewater treatment plant in Mission, which will serve Palmview customers.

The utility district agreed to pay back $10.5 million plus interest during the next 30 years, according to the First Southwest analysis.

Making the debt payments and covering the cost of sewer service will be key factors when the utility board sets sewer rates.

Palmview customers could pay a $15 monthly “maintenance and operating charge” and $26.53 for sewer service, according to the First Southwest analysis. Add the average water bill — $36.29 per month — and the total bill for Palmview customers would hit $77.82 per month.
While probably in the ballpark, the numbers provided by First Southwest aren’t final, Saenz said.

The utility district hired Frisco-based Capex Consulting Group to conduct a rate study, which will include the Palmview sewer project. Saenz said he plans to meet with the consultant, Jeff G. Snowden, in mid-July to discuss the findings.

After meeting with the consultant, Saenz said he plans to brief the utility board in August. The board will set the Palmview sewer rate based on the debt payments and the rate study.

Saenz said he hasn’t heard complaints about the proposed sewer rate yet, but some residents were upset the utility district would require them to stop using septic tanks.

“Some just don’t want it because they feel their septic system is fine,” Saenz said, adding that homeowners on standard-sized lots will be required to connect.

Based on the current construction schedule, the utility district plans to start billing Palmview customers during the first quarter of 2019.

“And they’ll come in waves,” Saenz said, adding that customers will start paying sewer bills when they receive service.

The Palmview City Council asked the utility district for information about the proposed sewer rates but never received a reply, said City Councilman Joel Garcia.
Palmview needs sewer service, but some residents will struggle to pay $42 more every month.

“Something has to be done,” Garcia said. “That’s too much money.”

When customers start complaining, Palmview will refer them to the utility district, Garcia said, emphasizing that the City Council can’t control sewer rates.

“We just need to let people know that we have no control over that,” Garcia said.

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