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San Marcos council approves electric and water rate changes amid warnings about bond covenants
Summary
The council approved new electric and water/wastewater rates after staff warned the utility funds need revenue to meet debt-service coverage and maintain bond ratings; electric ordinance passed 5–2, water/wastewater passed 4–3.
The San Marcos City Council on Sept. 16 approved updated rates for the electric utility and for water, wholesale water, reclaimed water and wastewater treatment services. Council passed the electric-rate ordinance on second reading and the water/wastewater ordinance after public and council debate about financial stability and legal debt covenants.
Director of Utilities Tyler York explained the rate structure and why a minimum (base) charge exists separate from consumption charges. He said the base portion is intended to cover fixed costs such as debt service and system overhead; for electric service the minimum monthly charge discussed in the meeting was $14.31. York said a properly structured base rate helps ensure the enterprise fund meets required coverage ratios.
Nut graf: Staff told council that failing to adopt recommended rate adjustments could push the electric fund below its…
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