GATESVILLE, TX — The City of Gatesville sells the water it gathers from Belton Lake to five other Central Texas water distributors.
Now, in an accountability move, the city has launched a study of wholesale water rates to make sure the city charges enough to cover the cost. The study comes ahead of an expected spike in the cost of drinking water.
Karen Spitzer calls tap water one of the best bargains around.
"I think it's reasonable for a family of four, for the rate that we pay in our home for the dishes that we do and laundry that we do," said Spitzer, a Gatesville water customer.
The City of Gatesville recently completed a survey of retail water rates and is now turning its attention to wholesale rates. They are rates that distributors, such as Mountain Water, Grove Water, Flat Fort Gates and Coryell City Water corporations, pay.
"A rate study will look at your revenues to your costs. If, in fact, your costs and revenues are out of balance, in other words, it's costing you more than the revenues are coming in, then you identify what that shortfall is," said Gatesville City Manager Bill Parry.
Parry said there are four elements that go into the cost of water. These include the cost of raw water, or the rights to it, operating costs, debt service and capital replacement for storage tanks and pipes.
He says the authority that oversees Belton Lake water is planning a big increase in the price it charges starting in 2021.
"Those rights will go up to about $76 to $78 an acre/foot, so they'll essentially quadruple," said Parry.
He says the study will show what it costs to gather, treat and distribute the water, and whether the current rates cover it.
Parry expects to have the results of the study in six months.
"Water is a business that we run separately, absolutely. We're trying to get it to pay for itself. That's exactly correct," said Parry.
It will also advise him how much to gradually raise rates so wholesale customers, and retail customers like Spitzer, don't get a case of "sticker shock" when the price goes up.
"I would prefer the rates to go up gradually. So, our family could budget better for the increase," said Spitzer.
The goal is to help families that drink Gatesville water pay for it, and keep Gatesville taxpayers off the hook.