After announcing last year that they were looking into separating their agreement for waste collection services with the Agua Special Utility District, the city of Palmview agreed last week to continue that relationship-at double the cost.
During their Tuesday, Aug. 6 meeting, city council members approved an updated interlocal agreement with Agua SUD who do the billing for trash collection services in the city.
“Both parties agreed it needed updating,” Palmview city Manager Michael Leo said of the agreement. “A lot of the terms stayed the same, there are some fees that Agua SUD charges the city for and Agua wanted to update the rates.”
With these updated rates, Agua will charge the city $2 for every account, double what they charged for in the old agreement.
As part of this agreement, the Edinburg-based Republic Services Waste Collection pick up the trash and residents are billed for their waste collection on their monthly water (Agua SUD) bill, Leo said. Once they (Agua SUD) collect that money they send it to Palmview to pay Republic Services.
Last year, Palmview was looking into assuming responsibility for the billing to be independent from Agua SUD, Leo said. Agua even agreed to extend the city’s 30 day notice of termination to assist them in the transition before deciding to renegotiate the agreement.
“We looked at the requirements of what it would take, the software and resources needed and the consensus at the time was that if Agua was willing to do the billing on our behalf, then we’ll let them do so and we’ll revisit this later,” Leo said.
Residents’ water bills won’t reflect this increase, Leo said. But it could be seen elsewhere.
“The city isn’t making money from this and as a result has to supplement any shortfall on behalf of the residents,” Leo said. “Up until now Agua hasn’t charged the customer, when they collect any payments they deduct it from what they give the city so that has not been directly billed to customers. However, we may have to include an administrative fee on residents water bills or maybe even a tax rate increase to make up for the difference. There are preliminary discussions to do so.”
“Money made from that won’t be money for the city. That would be money to cover what Agua is charging for billing services.”
Leo also added that the renewed agreement is a sign of the working relationship between the city and Agua. Last year, both entities were at odds with each other over lawsuits stemming from the city’s attempt to build a separate sewer system. The litigation was ultimately dropped earlier this year.
“This agreement is a reflection of the two entities working together, Leo said. “The direction the city is moving in is a position where we will be able to do that billing independently from Agua SUD in the future. They have conveyed to us we can do so when we are ready and will continue to cover the billing up until that point.”