City of Sealy Increases Water and Sewer Rates by 15 Percent [VIDEO]

The February 28, 2017 City Council Meeting, item 21 on the agenda for the meeting read:

Discussion and possible action to approve an ordinance of which the caption reads:

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEALY, TEXAS, ESTABLISHING
AND PROVIDING RATES FOR SERVICES OF THE WATERWORKS AND SANITARY SEWER SYSTEMS OF THE CITY; PROVIDING FOR THE PAYMENT THEREOF; ESTABLISHING FEES FOR CONNECTION TO SAID SYSTEMS; REPEALING ORDINANCE 2016-29 ADOPTED ON THE 5TH DAY OF DECEMBER, 2016 AND ALL OTHER ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT OR INCONSISTENT WITH THIS ORDINANCE; AND PROVIDING FOR SEVERABILITY.  (This is the first of two readings.)

According to the City Manager, the new rate will go into effect sometime around March 25; provided it passes the second reading.

Three people signed up to speak to council and voice their opposition to the proposed rate increase (viewable at the 6:13 mark of the video below).

After the public comment, Councilman Michael Kubricht expressed concerns that the city had not done a good enough job explaining to the public why it was necessary to raise the rates.  City Manager Larry Kuciemba then took the opportunity to outline why the rates needed to be raised (viewable at the 19:26 mark of the video).

According to him, the reasoning was two-fold:

  1. The rates of the city, when compared to the rest of the state, are half of the states’ average for water and sewer.  Should the city wish to apply for any grants in the future, the first thing the state will do is look at the rates being charged to the citizenry.   The rates being below the average would disqualify the city from several different grants.
  2. The city has a shortfall of $876,000 when the council reduced the rate back to the old rate, it caused the shortfall.

Councilman Kubricht asked for more clarification for the people of the city as to why the city had to raise the rates in the first place.  Mr. Kuciemba further clarified (20:10 of the video), that because the wastewater treatment plant came back as costlier than originally estimated, this led to the shortfall for the city.  He went on to explain that the city borrowed money in 2015 to the total of $15 million.  The city continues to pay interest on this money every year even though it will not be utilized until 2019.  The interest on this borrowed money is about half a million a year.  The agreement that was entered, before his tenure, was an agreement that had a pre-payment penalty.  The agreement is that the city will pay ten years of interest plus the outstanding balance.  He stated that when he came on as city manager he went to see if there was any way the city could get out of the debt obligation.    He was told that the city would have to pay $20 million to pay back the original $15 million that was borrowed 4 years ahead of time. 

Kuciemba continued that of the $15 million, 11 million was to be for the sewer treatment plant and 2 million was to be for the proposed YMCA.  There was also an additional $2 million that was allocated for various things to go along with the projects (water lines, etc.).  The city is still obligated for the $2 million for the YMCA but, the figure that came back for the sewer treatment plant was not the original $11 million but, $15 million.  And, this is what he and the council have been working with for the last year and a half; trying to figure out how to make up the difference of the additional 2 – 4 million dollars that will be needed.  This is all in addition to having to pay the half a million in interest each year for the borrowed funds.

Councilman Kubricht then clarified (22:31 of the video) that the reason the money was borrowed so early was that the information they were given by the city manager of the time as well as the engineering firm was that the current wastewater treatment plant was about to fail.  That the current plant was at capacity or right at capacity and if the council didn’t make a move quickly they would be “swimming in sewage”. 

Councilman Larry Koy then requested that the engineer that the city is utilizing for the project be brought back to the next council meeting or for a workshop be set up for further discussion (24:05 of the video)

Janice Whitehead then expressed her desire to keep the water and sewer increase at no more than 10% this year and perhaps a further 10% next year. 

Councilman Hinze also expressed his concerns and shared what he had heard from his constituency.

The mayor then called for a motion which Councilman Koy motioned for a 15% increase in water and sewer fees.  The motion was seconded by Councilman Jennifer Sullivan and was voted on and passed by a vote of 5 to 2 with Councilman Janice Whitehead and Councilman Sandra Vrablec opposing. 

Supplemental Information to this article:  Councilman Jennifer Sullivan has made an in depth explanation of the vote on her Facebook page.  If you would like to read it you can click HERE to be taken there.

Below is the video of that section of the Sealy City Council Meeting: