On September 5, 2023, the Rockport City Council approved new water and wastewater utility rates that disproportionately impacted out-of-city ratepayers as can be seen in the table below (note: this table shows rates for a 3/4-inch tap size). 

During the August 3rd budget workshop, city staff and city council members demonstrated a clear willingness to have out-of-city ratepayers subsidize the in-city rates. Their disdain for out-of-city ratepayers was best demonstrated by the city manager’s statement “if you want to pay 50% less, I got an annexation form for you” and the laughter by staff and city council members that followed. 

 

At each of the next four city council meetings, ratepayers asked the city to set just and reasonable rates, and to justify the 40%+ out-of-city surcharge. Only once during these meetings was the question asked by city council about the added cost of providing service to out-of-city ratepayers, and the city manager was unable to provide an answer other than inferring it was in the rate studies (it is not). The only justification provided in the meetings for the surcharge is the out-of-city ratepayers don’t pay city taxes, and city taxes pay for administrative costs supporting the utilities. This statement fails to recognize the utilities are already paying for general city staff support through large budget transfers, such as these shown in the August 8th budget presentation to council: 

 

• $659,381 for “8501 Transfer to General Fund/Franchise Fee” 
• $783,000 for “8502 Transfer to General Fund in Lieu of Taxes” 
• $386,438 for “8505 Transfer to General Fund - Admin Salaries” 

 

In summary, the city had not justified any added costs to deliver service to out-of-city ratepayers and had instead shown a willingness to keep in-city rates artificially low at the expense of out-of-city ratepayers. 

 

Because we did not believe the adopted rates were just and reasonable, we filed an appeal on December 4th, 2023, in the form of a petition to the Public Utility Commission of Texas (PUCT) in accordance with Texas Water Code Section 13.043(b).

 

The city rescinded September's out-of-city rate increase at its December 13th meeting because it knew it could not justify the rates to the PUC. This was a big win for the out-of-city ratepayers as the surcharge has been reduced from 47% to 33% and will save the out-of-city ratepayers approximately $43,000 per month.

 

What’s the Process? [This is no longer in play because of the city's decision]

 

The appeal process is summarized in the Public Utility Commission's Utili-Facts Appealing a Rate Decision. Here are some of the highlights:

 

The petition had to be signed by 10 percent of the affected ratepayers eligible to appeal. We had 90 days after the effective day of the rate change to get approximately 500 signatures and to file the petition. 

 

The PUCT reviews submitted petitions to ensure completeness. If the petition is accepted for filing, a PUCT engineer, accountant, and attorney are assigned and the petition is forwarded to the State Office of Administrative Hearings (SOAH) so that a contested case hearing can be scheduled. SOAH will assign an administrative law judge (ALJ) to hear the case. The ALJ will give the parties an opportunity to reach a settlement on the appeal. If the parties cannot agree to a settlement, the administrative law judge will set a procedural schedule for discovery and an evidentiary hearing. When the hearing process is completed, the ALJ prepares a “Proposal for Decision” to submit to the three PUCT Commissioners. The Commissioners make the final decision on the ratepayers’ appeal. 

 

Note that the rates being appealed can be put into effect while the appeal is pending. If the Commissioners set lower rates, refunds may be ordered. 

 

For More Information 

 

See the History page on this site for a chronological listing of events related to the rate increase.

Monitor the “Aransas County - Let us vote” group on Facebook for regular updates.

Listen to the city’s meetings on the “Aransas County Voters Coalition” YouTube channel and see the video descriptions for relevant timestamps.