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Consultant warns Cotulla utilities risk shortfall without staged rate increases; council approves wastewater task orders
Summary
A consultant told the council the water/wastewater system needs staged rate increases to cover rising operating costs and new debt; council approved CDM Smith task orders for wastewater screening and plan/permit updates and ratified an emergency well repair invoice.
A consultant presenting a utility rate study told the Cotulla council July 11 that unchanged rates and new debt would drive the water and wastewater system into the red within a few years, and recommended a multi‑year, staged rate plan to restore cash flow and meet lender coverage requirements.
Jeff Snowden of CapEx Consulting said service revenues have been essentially flat since 2018 while operating expenses and debt service have grown; he noted the system currently receives about $620,000 in general‑fund subsidies and recommended staged residential increases (for example, a $2.68 monthly increase on the example 10,000‑gallon combined bill beginning Oct. 1, 2024, followed by annual steps to reach an illustrative $66.12 combined bill by October 2028) to avoid running deficits and to meet Water Development Board loan coverage if the city borrows for water projects.
Following the presentation, the council approved several water/wastewater items: (1) a CDM Smith task‑order amendment to prepare bid‑ready documents and construction administration for an influent coarse‑screen project at the wastewater plant (task order number 2, cited at $82,400 for that phase) and (2) a separate CDM Smith task order for planning and permit updates (water conservation plan, wastewater discharge permit renewal, and a risk‑and‑resilience assessment) in the amount of $134,080. Staff said the city could qualify for roughly 70% principal forgiveness from TWDB for certain projects and that FEMA and TWDB coordination remains ongoing.
Council also ratified an emergency invoice of about $103,691.81 for deep‑well pump and motor repairs after a power surge and progressive pump damage; staff said the repaired well is among the system’s highest‑producers and the repair cost reflected depth and equipment size.
Attribution: Jeff Snowden presented the rate-study findings; Stacy Barna of CDM Smith and city staff described design scopes and funding prospects and answered council questions.
