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Staff says Kerrville’s reclaimed-water system runs at a loss; proposes rate changes to reduce burden on water fund
Summary
City staff reported the reclaimed-water system’s annual operating and debt costs (~$1.8 million) far exceed current reclaimed-water revenue (~$178,000); staff presented rate models including higher volumetric and flat rates and recommended council consider changes at next budget workshop
City staff on June 10 told the Kerrville City Council workshop that the city’s reclaimed (reused) water system is paying much more to operate and service debt than it collects in customer fees, and presented rate models the city could use to reduce pressure on the Water and Sewer Fund.
Rodriguez, a city staff member, said the reclaimed-water retention pond and associated distribution system — completed in 2020 — was a $21.7 million project funded with a 2016 bond series (about $8.035 million allocated by the city), a $7.5 million loan from KPUB and a $3 million contribution from the EIC. "We had some undesignated funds...and then we had some old unused bond dollars that we went ahead and used up for the water system to complete that $21,700,000 project," Rodriguez said.
Rodriguez told council the system has a storage capacity of about 90,000,000 gallons and that annual operating costs for…
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