This article appeared in the Nov. 19 issue of the Progress Times.
The Agua Special Utility District plans to adopt a nearly $11.5 million budget in December that absorbs higher operating costs without increasing water and sewer rates.
General Manager Roberto J. Salinas and the utility board discussed the proposed budget during a workshop Saturday morning.
“Everything has gone up — from insurance to fuel, cost of pipe, chemicals,” said board President Homer Tijerina. “And that’s why we have to adjust the budget. To cover those expenses.”
While the budget is balanced, Agua SUD projects a surplus of just $7,193 on nearly $11.5 million in revenue.
Salinas and Tijerina said they’re comfortable with the budget, which includes conservative revenue projections.
“And, of course, we’re going to have to work the budget very tight this next year,” Salinas said.
The single largest expense is employee salaries and benefits.
Agua SUD had 78 full-time employees in 2018, according to budget documents reviewed by the utility board. During the past three years, Agua SUD reduced the number of full-time employees to 73.
In 2022, the utility district plans to cut two positions — one in the water distribution department and one in the sewer department — and create a foreman position. The adjustments will leave Agua SUD with 72 full-time employees.
They will receive a 2% raise next year. Agua SUD will also pay more for health insurance.
“Our renewal came in a tad high,” said Ismael “Smiley” Martinez of Edinburg, an insurance consultant for Agua SUD. “We had a 42.2% increase. And that was due to claims.”
Martinez said they negotiated the increase down to 30.8%. The increase will cost Agua SUD nearly $77,000.
A combination of cost savings and revenue growth allowed Agua SUD to absorb the expenses without increasing rates.
Agua SUD renegotiated a contract with Hidalgo County Irrigation District #6, which is projected to save the utility district more than $170,000 annually.
Under the old contract, District #6 agreed to provide Agua SUD with 5,700 acre feet of water every year.
An acre foot — nearly 326,000 gallons — is an agricultural measurement for the amount of water required to flood an acre of land with a foot of water.
Agua SUD, though, didn’t actually need that much water. From 2014 to 2019, Agua SUD paid District #6 more than $170,000 every year for water it never used.
Under the new contract, Agua SUD adjusted water supply to meet demand.
Agua SUD also projects more revenue from water bills, sewer bills and fees next year.
Water charges account for nearly 83% of Agua SUD revenue, according to budget documents reviewed by the utility board. Sewer charges account for just 6%.
Salinas said he expects both revenue sources to grow next year.
Agua SUD is adding about 25 new water customers per month, Salinas said, and the completion of the Palmview sewer project will provide a substantial revenue boost.
The utility district also collects a significant amount of money from customer charges and fees.
Agua SUD expects revenue from “Meter & Related Fees” to jump from nearly $213,000 to $353,000 next year. Salinas said a combination of new fees and fee increases account for the nearly 66% increase.
The utility board plans to approve the budget in December.
“We adopt this and, as you know, we need to keep an eye on it month by month by month,” Salinas said. “So that we can continue with the operations.”