By Amy Bearden / Mineral Wells Area News

NewGen Strategies conducted a utility study and rate plan for the next five years. The findings were presented to Council and new rates will be established for 2024 at the September 12th City Council meeting

Last December Mineral Wells City Council approved a proposal from NewGen Strategies & Solutions to conduct a water and wastewater cost of service and rate design study to cover the next five fiscal years. The City’s current rates are set to expire this year.

The finalized overall analysis of the water and wastewater utility rate study was presented by Andy McCartney of NewGen to the City Council on July 11, 2023. According to their findings, the cost of water will increase 68% in 2024 due to the debt incurred by the Palo Pinto County Municipal Water District # 1 in their planning of the Turkey Peak Reservoir. The study also found that the City’s base meter charges currently are not aligning with American Water Works Association standard meter equivalency factors.

NewGen presented the Council with two possible scenarios to consider as solutions for providing water to the community in the coming years. According to the presentation, solutions to the City’s water crisis will carry a hefty price tag anywhere from $87 million to $287 million, depending on their choice of Scenario 1 or Scenario 2. Council will spend the coming weeks exploring both options and finalize a decision at the September 12th regular meeting.

Water Woes Background: How did we get here?

City Manager Dean Sullivan has been unapologetic about digging into the water problems that have plagued the community for many years. Sullivan inherited a disaster as he took over the City Manager position in 2021, retiring from his job as the City’s Police Chief, to take the top leadership position. He vowed to look into the water problems and find some answers.

“In past, we’ve just kicked the can on down the road,” Sullivan said of past leadership. “We’ve just run out of road.”

The City provides water for its residents as well as seven other wholesale customers, who in turn deliver potable water to nearby communities. Since winter storm Uri in 2021, the deteriorating condition of the 60-year-old water treatment plant was brought to light and was clearly dilapidated so much that TCEQ, the States’s governing water agency, issued fines in 2022 to the City and demanded some upgrades to the water treatment facility as well as requiring wholesaler’s to decrease their usage, prompting long-standing contract renegotiations.

Crippling the situation is the City’s current water source, Lake Palo Pinto, which has a wide and shallow footprint, causing rapid evaporation in the hot Texas sun. The region is amid a severe drought once again, and officials are battling below average rainfalls to fill the reservoir and evaporation is a never ending problem. The lack of depth in the lake causes the water to disappear quickly in the hot temperatures.

Currently Lake Palo Pinto’s water level is below 47% capacity or 859.74 MLS, which is why Stage 2 Outdoor Watering Restriction are in place. No outdoor watering is allowed in Mineral Wells other than for a animals. A Moderate Drought has returned over the lake’s watershed, with Severe Drought conditions looming. The 90-day weather outlook remains unchanged and calls for unseasonably high temperatures and below average rainfall.

Updated lake level projections now indicate levels may fall to the Stage 3 level by early September. Should the level of Lake Palo Pinto fall below 857’ MSL, Stage 3 of the Drought Contingency and Water Conservation emergency measures will become necessary.

Stage 2 of the Drought Contingency Plan also calls for water from the Brazos River to be blended to produce potable water, and recently the PPMWD1 received a permit from the Brazos River Authority to begin blending, but according to the City’s July 7 Weekly Drought Contingency Update, TCEQ did not approve the take point in the updated Brazos River water blending plan, although it was previously approved by TCEQ in the 2015 blending plan. City staff and PPCMWD engineers along with legal counsel are working through this issue.

Solutions: A Tale of Two Scenarios

NewGen offered two solutions that could potentially solve the area’s water problems and both scenarios will cause a dramatic increase in customer’s bills over the next five years.

Scenario 1 presented to Council, at a cost of $87.5 million, includes building a new $41 million water treatment plant, a $28 million pipeline for Brazos Pump Station upgrades, $500,000 for lift station upgrades, a $9 million Public Works Complex (at the recently donated Denon Energy property), and $7 million for a reuse program and upgrade at the existing wastewater treatment plant.

Scenario 2 would include all of the projects in Scenario 1 as well as the completion of Turkey Peak Reservoir at an additional $200 million for a total cost of $287 million.

How will these capital projects impact future water bills?

NewGen displayed slides in their presentation to Council that showed various calculations of bills with the projected water rates for both Scenario 1 and 2 over the next five years, as well as graphs showing bill comparisons to other regional municipalities.

A graph highlighting other regional municipalities’ water bills showed Mineral Wells currently has some of the lowest bills among the communities listed in the study.

NewGen indicated that a City resident’s water bill, based on minimum monthly connection fees and utilizing up to 2000 gallons a month, currently runs about $65 in 2023. If Council votes to implement Scenario 1, that same bill in 2024 would jump to $81. If Scenario 2 is chosen by Council, that same $65 bill would go up to $128 in 2024, catapulting Mineral Wells to the top of the list as the most expensive municipal water bills NewGen studied.

For comparison, a household of four that averages 5000 gallons a month currently pay just over $100 for their bills in 2023. Scenario 1 takes that same bill to $129 in 2024 and $173 by 2028. Scenario 2 would make the same $100 water bill in 2023 rise to more than $200 in 2024, increasing subsequently each year to over $250 by 2028.

In a nutshell, Scenario 1 will double the minimum monthly fees and water volume rates over the next five years. Scenario 2 will immediately more than double those minimum monthly fees and volume rates for 2024 and by 2028, the numbers more than triple.

“This is about the future. To hear it today, absolutely it shocks the conscience,” said Sullivan about the price tag of the project, lamenting that delaying isn’t feasible.

Sullivan claimed after the Council meeting, “The cost of the project goes up $200,000 a month. How long do we wait? We are going to need water regardless.”

“I was not surprised that the numbers were high. The news that the bill of an average residential user like me could more than double in a few years is of course very painful. Over $200 a month for a water bill is not pocket change. As council members, we must weigh the sticker shock of doing these projects against the potential huge risk of not doing them. What are the downsides? In my view, more future restrictions are one downside, as well as continued restrictions on growth for our area because wholesalers cannot approve new taps. Another concern I take seriously is the misery as well as bad PR that real water problems could bring to our area. Across the very long term, inadequate water infrastructure could devastate your family’s investment in our area, whether you own a home, a business, multiple rental properties, or have simply made this your residence for many years. Over the coming weeks the council will have its discussion about the water rates. I take your concerns about the cost seriously. I also take the responsibility of helping ensure adequate water supply seriously. The past is in the past. Even if you agree with those who claim mismanagement or inaction, there’s nothing to be done about it that I can see. I am committed to working to help ensure that we aren’t in a water emergency every 5-10 years because it hasn’t rained enough.”

~Beth Watson, Mineral Wells City Councilwoman Facebook Post

How do you pay for it?

McCartney told the Council that NewGen recommends financing Scenario 1 with a 20 year loan and Scenario 2 with a 30 year loan, both carrying an interest rate of 4.12%.

“The numbers are a little bit staggering,” said said Councilman Doyle Light. “But there is nothing we can do about that.”

“It’s no doubt we all have some really difficult decisions to be making soon,” said Light.

The City Council is set to vote on water rates September 12th at 6pm in the City Hall Annex. A link to the entire NewGen slide presentation of the Rate Study can found on the City’s website or their You Tube Channel has a video of the live presentation.

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