Tag: utility rates

Hours 0:00-2:36, 9/5/23

by The San Marxist, posted in Hour summaries

Citizen Comment:

The main topic of the night is the budget, so the main complaint during citizen comment is that taxes are too high. Taxes are too high, and also the city isn’t solving all our problems, which is basically the municipal equivalent of “the food was terrible and the portions were too small!”

(And also, people hating on the bike lanes.  Everyone loves to hate the bike lanes.  If you love bike lanes, I suggest you let City Council know, because the anti-bike lane people are kicking up dust.)

Confidential to city council: I like the bike lanes. Let’s keep bikers alive.

Back to taxes. I’m going to tell you a little parable of my cat: 

I had a lovely tomcat who was scared of the vacuum cleaner. Whenever I ran the vacuum cleaner, he would lose his mind and attack my shoes.  He would just beat my poor shoe all to hell. (I tried not to vacuum very often.)

That’s the end of the story!

Here’s the thinly veiled moral: Being mad about taxes is like my cat attacking my shoe.  Don’t be mad at taxes for your justifiable economic woes.  You are neck-deep in capitalism! Be mad at that! You are right to feel worried that a medical disaster could undo everything you’re working for, or that you might be destitute in your old age, or unable to help out your kids.  The real crime is that someone can work fulltime and not be able to cover their basic needs.

If you know, if you truly 100% trust, that you’ll always have clean safe housing, healthy food, and free medical care readily available, then your life is much freer.  That’s the paradox: we pretend this is freedom while paralyzing ourselves with anxiety.  We’re such a mess.

Anyway, hooray for taxes.  Hooray for a social safety net, and if only it were much stronger. We’ll talk more about who gets tax breaks, and what kind of charity that is, a little later on. In the meantime, if you’re still mad about taxes, scroll through this little demo on the scale of economic inequality and get back to me. 

One comment that’s not about taxes: Virginia Parker spoke on behalf of the San Marcos River Foundation. Basically:

  • Everyone is freaked out by the river and parks right now
  • The summer was so hot, the river is so low, the parks are so overused
  • We desperately need more park staff and marshalls.  (These are her words. I’m not totally clear on what the marshalls do.)
  • We should have paid parking with free passes for residents to help offset costs
  • Only remaining vegetation are those fenced off Habitat Protection areas, and keeping that vegetation is crucial to keeping the river clear
  • We’re spending a bunch of money to promote tourism, but with the river in its current state, that’s kinda irresponsible. 

Item 13: The 2024 $315 million dollar city budget.

It takes 9 months to birth a budget. Here’s the basic timeline:

At the workshop last January, Council came up with their goals that are supposed to shape the whole process: 

They are all important, but public safety was the one that council really hammered, over and over again.  “Public safety” can mean so many different things to different people!  Do we mean lifting people out of poverty? Do we mean vocational training for ex-offenders as they transition to private life? Do we mean hiring more cops? (We definitely mean hiring more cops.)

The budget has a ton of moving parts, obviously.  Here’s the bird’s eye view of the whole thing:

Here are the major points that were emphasized:

Note:

  • The compensation study is to help us retain city staff. This is important – high turnover is incredibly expensive. Also, it’s just good manners to compensate people fairly.
  • The Human Services Advisory Board money is the money that the city gives to local nonprofits.
  • New city hall: there’s a state law that you can’t borrow money for a city hall building. (It’s wild what the state legislature will micro-manage.) So if your city hall was built in 1975 and you’ve outgrown it, you have to sock money away under a mattress until 2075, when you’ll be able to afford your new city hall.
  • Capital Improvements Program: this just means city projects and repairs. Fix the stormwater drainage in this neighborhood, add in sidewalks over there, etc.

So is this a good budget? Does it achieve those five goals? I don’t know!

Last year, city staff presented Council with 2 similar plans, and they debated them. Would we go with 59.3¢ or 60.3¢ tax rate? Would we use the extra $700K on cops and firefighters?  Last year, Chief Stephens and Chief Standridge came in person to plea for personnel. This made it easier for me to understand those aspects of the budget being discussed.

This year, there was just one budget and just one tax rate proposed. No debates. No lingering questions posed.  City council basically didn’t say anything besides thanking staff for their hard work. (And I listened to most of the workshops, and never heard much arguing there, either.)  There are two possibilities:

  1. Staff is just great.  They’re producing top notch budgets, and there’s not much to argue about.
  2. No one on council has strong feelings about these things, and no one has an angle to dig in and get heated up about anything.

Probably both are true? It’s very hard to figure out what people are thinking when no one says anything substantive.  

Here is the actual budget. It’s pretty readable!  It’s just hard to evaluate.

Item 14: the tax rate

We’ve been over the different tax rates before, so I’m going to save my pixels and just use the city’s slide:

The 60.3¢ rate is the same as last year.  Of course, inflation’s been a thing.  So how much are taxes going up? 

The average home went from $294K to $338K, so the average homeowner’s city property taxes are going from $1,686 in 2023 to $1,949 in 2024. 

Details:

(Now, this is only part of your tax bill. You also pay SMCISD and Hays property taxes.)

Let’s talk about the (15,000). That’s the homestead exemption.  In other words, you get a 15K discount before we charge you property tax.  This was created in 2022. It also gave seniors and people with disabilities a 35K deduction. 

Was this a big deal? Yes and no:

It costs us about $1.1 million dollars, out of $315 million budget, to do so.  Every home owner in San Marcos gets to evenly split $1.1 million dollars. None of them think that they just got a $90 bonus check from the city, but they did.

Here’s the thing:  We spend $550K on funding various nonprofits around town.  (This is the whole Human Services Advisory Board thing.)  We hem and haw and dole out $15K here and $25K there, and make nonprofits put in a ton of work for little amounts of money.  

At the same time, we spend twice as much on charity to people who own their own homes as we spend on all other nonprofits, combined. San Marcos is 75% renters! That handout is only going to 25% of the population!

Some home owners are rich. Others are definitely not. Being house-poor is definitely a real thing, and we need to help house-poor home owners. All I want is for the homestead exemption to feel like the city sent you a physical $90 check. It should not be invisible.

If I had a magic wand, I’d say that everyone must pay their full tax bill – federal and local – and then any deductions would get mailed back as a refund.  Subsidizing the rich should feel as tangible as subsidizing the poor. 

(Why not just cure poverty with your magic wand? oh hush.)

…

Items 15-18: Your utility and water rates are going up.  I’m sorry.  Sort of.  Channel your anger towards structural inequality.

For electric, we’re still the cheapest around:

Don’t let anyone ever talk about privatizing public utilities.  

Here’s our water rate:

Well, it’s mid, as the kids say.

Staff says that one of our biggest water expenses is a $1.4 million contract with Alliance Regional Water Authority.

I can’t actually find the contract in the budget, so I don’t know what we’re paying yearly:

I see Alliance Water Revenue, but not an expense. (I must be looking in the wrong place, idk.)

What is this contract? Basically, in 2007 we got some funding from the state to build this organization with Kyle, Buda, and the Canyon Regional Water Authority.  We drilled 4 wells, and we’re laying a bunch of segments of pipes, and some storage tanks, and a water treatment plant.

The water looks like it comes from the Carrizo-Wilcox Aquifer, which is here:

So not TOO far away.  

Carrizo water needs to be treated – it’s got more minerals and salt in it than surface water or Edwards Aquifer water.  But it sounds like there’s a LOT of it.  During the Council meeting, staff says that this is supposed to be a 40 year plan for getting us water.  I can’t find that promise written down anywhere though.

Either way: water rights are going to be a big, messy fight coming up in the future.  It’s good that we’ve got at least somewhat of a plan. 

…

Along with water and electric, there’s also garbage and recycling:

and also a Community Enhancement Fee:

So if I’m ballparking all that, your rates for all these services is going from:

58.20+49.27+28.80+1.5 = $137.77

to

59.43+51.71+29.66+2.35 = $143.15

So your monthly bill is going up $5.38.

(This isn’t exactly right, because I don’t know how much electricity and water the average household uses each month. I have to assume the city gave us monthly quantities.)(They actually mentioned the total increase at one point, but I missed it, and now I can’t find it.)

San Marcos is not rich. If you are struggling, consider the Utility Assistance Program, why doncha? (That’s Community Action, but the city partners with them.)

Full disclosure: the Utility Assistance application form is a little intimidating, at least to me. It is not Community Action’s fault that their application is cumbersome. It’s the culmination of a maze-like system of scrabbling for peanuts that we impose on nonprofits.

When I say my fantasy is a strong social safety net, my fantasy is also that it will be very easy to use.

…

There were two moments that I want to share:

  1. The vote to raise the utility rate by 5%:

Yes: Jane Hughson, Mark Gleason, Jude Prather
No: Shane Scott and Saul Gonzalez
Absent: Matthew Mendoza, Alyssa Garza.

WHOOPS. It takes four votes to pass. So since Matthew Mendoza and Alyssa Garza were absent, it failed. 

You could practically hear City Manager Stephanie Reyes’ stomach plummet through the floor, although she is the most poised person on the planet. She politely explained that we’ve now blown a giant hole in the budget, and we’ll need to revise it, and that we may need a special session in order to get everything passed by October 1st.

With that, Shane Scott offered to switch his vote, which I’m sure was a massive relief.  He explained that he just reflexively is a “no” on rate hikes, but didn’t actually want all those consequences to come crashing down.

The re-vote:

Yes: Jane Hughson, Mark Gleason, Jude Prather, Shane Scott
No: Saul Gonzalez
Absent: Matthew Mendoza, Alyssa Garza.

Phew.

  1. Matthew Mendoza was absent during the utilities conversation, but he arrived in time for the Community Enhancement Fee conversation. This is small, but it irritated me: 

Matthew asked, “What if an evicted person decides to throw all their stuff all over their front yard? Can this fee help with that kind of thing?”

Listen: don’t phrase it like that. A yard full of possessions is mostly a sign that someone’s problems are too big for them, and I don’t mean the landlord.

Also, it’s just plain wrong. Evicted people don’t throw all their stuff all over their front yard.  Evicted people just left their stuff exactly where it was, and did not move it one inch. Someone else got mad – like an ex-boyfriend or ex-girlfriend – and threw out their stuff, or the landlord moved it all to the curb.

(The answer was no, Matthew, you cannot use this money for that purpose, why would public money be used to help landlords clean up after tenants.)

Hour 4, 3/1/22

by The San Marxist, posted in Hour summaries

Item 27: THIS IS WHY I BLOG.

Shane Scott and Saul Gonzales brought this agenda item up. Because of equity/poverty/other buzzwords, Shane Scott wants to reduce your water and wastewater bills. He thinks it’s crazy that it’s so high.

His proposal is to restructure the rate system. He says right now, you get the first 6000 gallons at a low price, and then tiered surcharges kicking in above that. Shane Scott wants you to get the first 8000 gallons at that same low price, and then pro-rated beyond that. THIS DOESN’T SAVE MOST PEOPLE MONEY. If you use 5000 gallons, you’ll get charged exactly the same! All this does is encourage a lot of people to use more water, because it’s free. (Maybe it helps big families, maybe, if they tend to use 6000-8000 gallons? They now get 1-2K gallons of water for free?) Shane Scott also wants to do something vague, similar, you know, for the wastewater rates.

First off, Shane Scott doesn’t even have the pricing structure right. According to the water guy:
Water rates: Base rate: $26.82 minimum.
Then $4.49 per 1000 gallons, up to 6000 gallons.
$7.86 per 1000 gallons after, up to 9000 gallons.
Then it goes to $9/1000 for the next tier, then $10.12/1000, then $11.24/1000, and then $13.48/1000 thereafter.

So you can imagine what Shane might mean – extend the $4.49 rate up to 8000 gallons. That would save a few people $6.42 per month, if they happen to already use exactly 8000 gallons per month. Good job, Shane.

Wastewater rates:
$27.88 per 1000 gallons, up to 2000 gallons.
$8.03 per 1000 gallons, thereafter.

The city uses a consultant to set prices that will cover costs and incentivize conservation. They don’t turn a profit.

Jude Prather makes the point that if you earn $1000, then $100 is a huge portion of your paycheck, whereas if you earn $10,000, it’s a negligible amount. What he’s trying to say is that flat taxes are regressive. This is very true. This is why sales taxes are problematic, but income taxes are better, and capital gains taxes and inheritance taxes are even better.

But water just isn’t a great context for that argument, because we’re talking about water. There’s a specific phrase for this: “tragedy of the commons”. Basically, if you have a pond, and too many people fish out of it, you’ll kill off the fish population and then nobody can use the pond anymore. When you have a natural resource and everyone partakes freely, you can wreck your natural resource really quickly. You have to drive consumption down and monitor what you can sustain.

Water needs to be priced to encourage conservation. Frankly, if I were setting the rates, I’d price the golf courses out of existence. But no one has consulted me on this.

Mayor Hughson says she’s all for lower rates, but how exactly are they going to pay for the water utility system and wastewater processing and the pipes and all the rest of it?

Jude Prather comes in sounding so correct that I thought it was the city water official at first. He says that people with huge water bills are watering their yards and filling up their pools, and that the real concern should be electric, and making sure that no one is going without air conditioning in the summer, when it can turn deadly for vulnerable people.

Mark Gleason also makes a lot of sense! His point is that city-run utilities are enormously complex and we should not make uninformed decisions. He also points out that it’s easy for someone to run up a $400 bill if they have a leak they don’t know about, or some extra family members staying with them, or they fall behind for a few months.

From there, Mayor Hughson and Alyssa Garza take the conversation over to the Lifeline Rate and the Utility Assistance Program, both which are so poorly advertised that those who need it have never heard of it. In fact, city council members – and your friendly marxist bloggers – don’t really know about such things, or how to direct someone to find it. The conversation seems to be coming to its natural conclusion: we need a concerted plan to strengthen the outreach effort for the Lifeline Rate and Utility Assistance Programs.

BUT WAIT. Shane Scott is not comfortable with his super dumb idea being molded into something reasonable! It’s not fair that relief only targets poor people! Rich people also need relief from their high water bills (under his plan which offers no relief, but encourages higher consumption).

He asserts that it is not so complex. Give him ten minutes and he could find all the savings we need. Mayor Hughson asks him why he didn’t come to his own agenda item prepared with a proposal then? He says he didn’t want to ram ideas down anyone’s throat. Dude, cut your losses and backpedal slowly away from this whole mess.

Saul Gonzales at leasts want to see the financial impact of the proposal. Everyone seems okay with looking at innovative ideas towards equity on water and wastewater rate setting.

They kick around other ideas: education, providing thermostats, mid-month notifications of your usage, and so on. Rebates from the Sustainability Committee for low-flow toilets and rain barrels. Finally it’s kicked over to staff to do some homework on the topic.

Shane Scott gets the last word. He wants to order staff: “Our customers want lower prices. Make it happen.” He is so mad that council can’t just march in and slash rates. And this is why I shout angrily at my computer while watching council meetings.

Finally: I was worried someone was going to suggest privatizing utilities to save money. Do not fall for this. This is a terrible idea. Here’s how it goes:
1. City gets bids from private companies showing wonderful cost savings.
2. Accept lowest bid.
3. City dismantles the department, lets people go, and generally loses the ability to return to the previous version.
4. Private company does a dreadfully shitty job and goes over budget.
5. Over time, bids escalate far more than the city’s costs would have.

Private companies want to turn a profit, which means charging more and delivering less. Don’t use private companies for public goods.

September 7th City Council Meeting (Part 1)

by The San Marxist, posted in Meetings

This was a big, important meeting. Here are the items I’m categorizing as Top Tier Importance:

  • The 21-22 budget
  • Rate increases for various utilities and setting the property tax rate for the next year
  • School Resource Officers
  • GSMP

I’ll start tackling these, and split it into separate posts if need be.

As an aside: this meeting ran until 1:05 AM on Wednesday morning. Wouldn’t it be nice if they adjourned at 10 pm, and reconvened on Wednesday evening for the last three hours? A well-rested councilmember is a happy councilmember, maybe?

  1. Item 21: Proposed Fiscal Year 21-22 Budget

The budget is one of these items which is very difficult for me to weigh in on and analyze. I don’t have years experience to compare this to. I did not watch the workshop in August where they sliced and diced it more finely.  So for now, I’m mostly observing and not analyzing.  The total city budget is $259 million.

There not many substantial questions. Shall we make the budget available to the public in infographic form?   Should departments notify council for budget adjustments? Sure, sure. Controversial details were hashed out already.  Aside from one: there are a number of rate increases which will be voted on in the next few items, however.

2. Items 22-25: Rate hikes for waterwastewater, electric, drainage, and solid waste.

Several rate increases for the utility funds: water, electric,  drainage utility solid waste. All votes passed the hikes with a 4-3 vote, with Commissioners Scott, Garza, and Gonzalez voting against the hikes.

The total rates average $100/year increase per household. Commissioner Scott made the case that this is a pandemic year and we should wait and double the rate increase next year. Gleason sensibly points out that these projects desperately need funding. Mayor Hughson also pointed out that saving the hike for a year and having to hit households with a doubly large hike isn’t necessarily best for anyone, either.

In my opinion, this is an “ounce of prevention is worth a pound of cure” situation. Keep your utilities maintained and running smoothly, lest ye run up a boatload of catastrophic expenses when a disaster strikes.

Of course I’m sympathetic to people in poverty being asked to contribute an extra $10/month. I would much prefer it if we had a progressive tax code instead of regressive one. But with utilities, it is scaled by usage, and it is worthwhile to incentivize reduction of water and electricity. Let’s keep utilities solvent via rate hikes, and then be generous with a social safety net. (Granted, we are depressingly stingy with the social safety net. But still. This is not the place to make up the difference.)

Item 26: Overall property tax rate for the coming year.

So, this is a bit math-heavy. Let’s see if I can keep it simple. The state of Texas caps how much a city can raise it’s property tax rate. By that, our upper bound tax rate is $0.7554 per $100 of property value. We are staying well below that, no worries.

Next up is the No New Revenue rate, where the city brings in the same amount as last year. This is set at $0.603 per $100. Now, the city has a bunch of properties that weren’t taxed last year. Those new properties will bring in $1.4 million under this tax rate, and so all existing properties actually get a tax break, which totals about $300K less than last year.

Finally there’s a penny deduction, which is discussed at length. Can we run the city on a tax rate of $0.593, instead of $0.603? On average, this will save each household $17. It costs the city about $600K to drop down.

They’ve prepared both a $0.593 and a $0.603 budget. So what gets cut? Six new positions for the police department. The city tells us that the extra $600K will pay for three traffic officers and three 911 dispatchers. So there’s the rub: lower taxes or fund the police? (As a dedicated lefty, I took a moment to relish the sheer poetry of making conservative commissioners pick between these choices.)

Commissioner Gleason was the first to wring his hands over this. He tries to find the $600K out of the CIP budget, but those projects aren’t actually paid for out of the current year, and so next year’s budget doesn’t do us any good right now. Commissioner Gonzalez tries to raid development impact fees, but that also can’t be redistributed for this use.

Commissioner Scott suggests that we use traffic ticket revenue, which pisses me off. That is exactly the kind of counter-incentive that leads to aggressive over-policing of minority communities. (Commissioner Baker makes that point in rebuttal.)

Chief Dandridge is invited to weigh in. I find him to be measured and thoughtful at these meetings. He says that we have 3200 car crashes per year, and a high number of young drivers, and every crash is time-consuming. Most cities have dedicated traffic officers to deal with accidents. As to the 911 dispatchers, we are covering a larger area than just the city and the staffing hasn’t increased since 2013, but our calls have gone up a lot.

Commissioner Baker weighs in. He’s okay with the 911 dispatchers but questions the need for more police officers, and points out that this is not the best way to reduce car crashes. He advocates for redesigning dangerous intersections and implementing a Slow Streets project, where streets are designed in a way that drivers automatically reduce their speed. (I am also a fan of these solutions.)

Commissioner Gleason again wrings his hand over this choice: Safety! But lower taxes! But safety! But lower taxes! You can see the smoke coming out his ears.

Commissioner Derrick speaks up. She agrees with Baker on the alternate solutions for safety, but points out that those take years, and we need to provide health, safety, and welfare now. (This is basically where I land, too. Traffic cops can be abusive or they can be a benefit to society. I don’t know which they will be, but the solution is not necessarily not to have officers available for car crashes.)

Finally it’s time. Mayor Hughson makes a motion to lower the tax rate to $0.593 …and no one seconds it! I was not expecting that! Exciting times.

So they vote on the original proposal of $0.603, which would fund the traffic cops and dispatchers.

For: Baker, Derrick, Gonzalez, Gleason, and Mayor Hughson.
Against: Garza, Scott.

……..

Let’s stop here, and we can save SROs and GSMP for the next post.