Lakeway Municipal Utility District customers will see an increase in their water rates and property taxes for the next fiscal year.

 On Sept. 23, LMUD board members voted to increase water base rates from $19 to $23.12 and by 25 cents per thousand gallons.
Consumers who use zero to 15,000 gallons will see their rate increase from $2.25 to $2.50 per thousand gallons. The rate will go up from $3 to $3.25 for those who use 15,000 to 30,000 gallons.
The in-district customer wastewater base rate will decrease from $14.69 to $13.49 and volume charges are unchanged. The out-of-district customer wastewater base rate has decreased to $70.71.
A 28 percent jump in the district’s water debt services expenses necessitated the increase, LMUD General Manager Richard Eason said. The district sold $5.87 million in new bonds, and the debt service for water facilities increased by $365,700.
The district also has started using a five-year volume average demand condition to calculate rates, as it implements a rate stabilization process. The new method reduced potential revenues, so the district had to have a rate increase, Eason said.
“If we had used the very dry test year volume to calculate rates, they could have remained steady, but there would have been insufficient revenue next year to cover the new debt service if it is not as dry as this year,” he said. “I think it would be imprudent to project another dry year.”
The board also voted to raise the district’s property tax rate from 19.22 cents per $100 of assessed property value to 19.67 cents for fiscal year 2009-10.
Debt service for in-district wastewater customers is recovered in the property tax. The minor reduction of in-district wastewater base rate is due to a projected decrease in wastewater expense. The change in the out-of-district wastewater rate is due to a complete revision in the methodology. The method considers only the cost of service and does not consider property value.
This is the same method that was used from the mid-1980s until 2001. With this return to the old methodology, the out-of-district wastewater customers pay the same base rate as the average in-district taxpaying wastewater customer. The out-of-district wastewater customer portion of the wastewater debt service is in the out-of-district wastewater base rate.
This methodology change was made after several consultations with former LMUD board President Mike Kuhn who was involved in developing this methodology. In addition, the district hired rate consultant and out-of-district customer Searcy Willis to review not only this aspect of rates, but the entire rate design. Willis designed the rate system in the late 1980s and 1990s.
“It took me awhile to come around, but now I see this is a fair and equitable way,” Eason said.
Associate Architect Chad Pierce of Seaux-Pierce Architecture updated the board on the schedule for its planned water treatment operations office, which will include laboratory, garage and storage spaces. It is slated to be one of the few “green” buildings in the area.
Officials are near the final stages of the design process and are pushing for a gold certification from the U.S. Green Building Council through its Leadership in Energy and Environmental Design rating system. Gold certification is the second-highest rating in the LEED system.
The operations office will run on wind-power energy, operate on a mechanical ventilation system that improves air quality, reduce water use through special fixtures on showerheads and faucets and harvest rainwater for landscaping among other environmentally friendly features.
Pierce said that it was likely the building would attain the gold rating but the achievement would be contingent on meeting several factors that could not be guaranteed at this stage.
Based upon previous discussions, board member Jerry Hieptas said, “Anything other than gold was failure.”
“This [building] is something we can hang our hat on. We need to be in that gold category,” LMUD Board President Tom Rogers said.
The design phase began in March on the 2,000-square-foot building at the utility district’s water plant site at the end of Lakeway Boulevard near Flamingo Boulevard. Construction costs are estimated to be less than $400,000, but the bidding process has not begun.
“I believe we can afford this [building], but in terms of priorities, this is one of the higher ones,” Eason said.
In other action, board members:
3 Amended the fiscal year 2008-09 budget with overruns of $142,958 in legal services and $174,929 in professional services, largely incurred by preventing the City of Lakeway’s takeover efforts this year.
“Roughly five months out of the year were consumed by the City of Lakeway’s advances,” Eason said.
3 Changed rates for its TCDRS Retirement Plan for 2010 from 10 percent to 11 percent;
3 Approved a 4 percent cost-of-living and merit raise for Eason in addition to a $3,000 bonus as well as updated his contract to include automatic renewals, a $500 monthly allowance for his personal vehicle and provisions for termination. If he were released from his contract without cause, he would receive one year of pay and allowances.
“There’s still a possibility the City [of Lakeway] will take us over,” Eason said.