Blue Mound water rates may jump double digits

Posted Wednesday, Sep. 11, 2013  comments  Print Reprints
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Blue Mound residents, after losing a legal and legislative battle to take over a privately-owned water system, could soon see a dramatic increase in their water and sewer rates.

Monarch Utilities, the Sugar Land-based company that provides water to Blue Mound, has filed a request for a 14.4 percent water rate increase application with the Texas Commission on Environmental Quality. The company is also seeking a 9.9 percent waste water rate increase.

Blue Mound, the small northwest Tarrant County community of about 2,400 people, has fought against higher rates which typically are three times as high as those in nearby cities that purchase water from Fort Worth.

Blue Mound Mayor Alan Hooks said he has hired a consultant and a “rate case” attorney from Austin to fight the proposed increase. He added that the city council will probably vote to deny Monarch’s request.

“I’m going to fight this, and I told them [Monarch Utilities] that I can’t agree to the rate hike,” Hooks said.

Cost of service

According to a news release from Monarch Utilities, the company would implement the rate hike in two phases beginning with a 9.9 percent increase on Jan. 1 and then a 4.5 percent increase on July 1. Sewer rates would also increase by 9.9 percent on Jan. 1.

A customer using 5,000 gallons a month — the average usage for Monarch customers, according to the company — would see their water and sewer bills climb from $144.8 to $166.32. By comparison a typical water customer in Fort Worth currently pays a combined water and sewer bill of $52.02.

When applying for the rate increase, Monarch considered factors including its $3.5 million investment in equipment and plant improvements in 2012, increasing costs to purchase wholesale water and other costs that are greater than income from customer rates.

“Taking these factors into account, Monarch’s cost-of-service study supports a rate increase of approximately 44 percent, but in an effort to be conciliatory with customers, the company is not doing so,” according to the news release.

Failed legislation

Last year, Blue Mound filed condemnation proceedings against Monarch Utilities, a subsidiary of California-based Southwest Water in hopes of taking over the water system and providing service at a lower cost to the blue collar community.

Three commissioners from Tarrant County were appointed and determined Monarch’s property had a fair market value of $2.75 million. Monarch fought the condemnation proceedings, stating that a general law city did not have the authority to condemn a private business.

In the middle of the court proceedings, Rep. Charlie Geren, R-Fort Worth, filed a bill that would have allowed Blue Mound legislation that would have allowed Blue Mound to take control of a “certificate of convenience and necessity” required by the state to operate the water system if a district court approved condemnation proceedings against Monarch Utilities.

Sen. Jane Nelson, R-Flower Mound, also filed a companion bill.

Geren stated previously that the company was “a bad actor” and that the residents were not treated fairly.

But after the legislation sailed through the Senate and passed in the house with only one nay vote, Gov. Rick Perry vetoed the bill and released a statement that the legislation “allows a city to condemn the real property of a water or sewer utility, making no provision for the value of lost business.”

“At a time when infrastructure is a focus for our growing state, this bill would provide a disincentive for development by private utilities. Additionally, there is pending litigation directly related to this issue,” the statement said.

In June, state District Judge Dana Womack dismissed Blue Mound’s case, but the city plans to appeal it.

Dan Barrett, an attorney representing Blue Mound, said an appeal should be filed in 30 to 60 days.

Elizabeth Campbell, 817-390-7696 Twitter: @fwstliz

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