New water rates in Lakeway Municipal Utility District seek to encourage conservation while assuring the LMUD can meet the needs of all customers, according to Lakeway MUD General Manager Richard Eason.

The Lakeway MUD Board of Directors approved the new rate structure at its Sept. 24 special Board meeting to take effect Oct. 1. It’s the first revision of the District’s rate structure since 1989. Director Kay Andrews was the lone dissenting vote.

“I felt this should have been adopted in a regular meeting, rather than a specially called meeting,” Andrews said.

After a $19 base charge for all customers, the new rate structure creates six tiers, based on usage.

For the first 15,000 gallons of usage, customers will pay $2.25 per thousand gallons, down from $2.50 per thousand in the old rate.

The cost-per-thousand gallons gradually rises depending on usage (see chart). At the high end, if a customer uses more than 100,000 gallons of water, the cost increases from $3.50 to $5 per thousand gallons.

“Even at the high end, a customer will pay less for a thousand gallons of water — treated to meet federal and state health standards and delivered to his home – than he pays for two gallons of gasoline,” noted Eason said.

One goal of the new rate structure is to reduce the strain on the water system during periods of peak use. Utilities have to build their systems to deliver water when demand is highest. By reducing demand, utilities can avoid building new capacity, which leads to higher rates for all customers.

“It’s only fair that the customers who use more, and put more strain on the system, pay a little more,” Eason said.

The new rates are consistent with national guidelines adopted by water industry organizations. Neighboring utilities, such as the City of Austin, Travis County Water Control and Improvement District No. 17 and Bee Cave, have tiered rates to accomplish similar purposes.

Even with the new rate structure, many residential users may see slightly lower bills. According to an analysis prepared for the Lakeway Board, 47 percent of residential customers will remain in the lowest rate tier, even during the peak usage times. During low-demand times, almost two-thirds of residential customers — 64 percent — will be in the lowest tier, according to Eason.

Lakeway MUD will continue to advise customers on ways to conserve water, he added.

The board also approved a bonus schedule for employees and Eason. Andrews also opposed those measures. She repeated the matter should have been considered during a regular session. She said she feels LMUD should hold the line on spending, in her vote against Eason’s 5.5 percent raise. His salary is $118,160. He also received a one-time $5,000 merit payment.