By CASSIE MCKEE, Four Points News
River Place residents will see some relief on their water bills in the form of a one-time credit after the River Place Homeowners Association reached a settlement deal with Austin Water Utility over what the HOA said was an unjust increase in water and wastewater rates by the city of Austin.
In December 2014, the HOA filed a Water Rate Protest with the Public Utility Commission against AWU, after the city imposed a dramatic increase in water and wastewater rates upon the ratepayers of the River Place Water and Wastewater Systems. Residents saw the first increase in October 2014 and then another increase in November 2014.
River Place HOA Board of Directors Cheryl Page, Tim Mattox, Scott Crosby, Rich Coppola, Ivar Rachkind, and attorney Randall Wilburn (standing) go over the terms of the settlement with River Place residents at a community meeting on July 29.
“The increased rates adopted by the City of Austin are unjust and unreasonable, and they unfairly burden existing customers with the costs to serve new development and to pay for City of Austin charges unrelated to the cost of service for the River Place Water and Wastewater System,” according to the petition filed by the HOA.
As a result of the rate increases, customers’ average monthly water bills increased from $73.50 to $131.34 on Oct. 1, and then to $149.93 on Nov. 1, 2014. The average monthly wastewater bills increased from $15.70 to $45.46 on October 1, and then to $46.71 on Nov. 1, 2014.
The rate increases affected 1,047 water utility customers and 1,035 sewer utility customers. The petition included the signatures of 359 customers, more than 34 percent of the affected ratepayers. State law only required signatures of 10 percent of affected ratepayers.
The petition filed by the HOA said the city failed to send written notice of the increase to customers and also did not provide individual, written notice to each petitioner within 60 days after the date of a final decision on a rate change as required by state law.
After a number of unsuccessful motions to dismiss the case, AWU agreed to an initial settlement conference in May and on July 22, the HOA board agreed to a final settlement, which is now pending approval by the Austin City Council. At a meeting on July 29, HOA President Scott Crosby explained the terms of the settlement to residents.
“The board is satisfied that this settlement is an appropriate conclusion to this case given the cost, time and risk of continuing,” Crosby said.
Crosby said the settlement has five main components. The first is that the HOA agrees to an abatement of further legal proceedings. Second, the settlement includes a one-time credit to the former MUD customers of the difference between the former MUD rates and the COA rates applied to the water usage in October 2014.
“I estimate this refund to exceed $125,000, based on the October 2014 water consumption,” Crosby said.
The third term of the settlement is that AWU will pay $800,000, which the River Place HOA will use to cover approximately $50,000 in legal fees and use the remaining amount to repay a portion of the $2,058,000 of MUD debt that the former MUD customer remain obligated to pay over the next three years.
“This will result in a decrease in the ad valorem tax charged by the MUD as part of our property taxes,” Crosby said. “This will apply to the former MUD customers.”
The settlement also contains an agreement that AWU will not attempt to recover expenses from the case from the former MUD customers. The final provision is that River Place customers will continue to pay COA residential retail water and wastewater rates until annexation, which is scheduled for Dec. 31, 2017.
Crosby said the HOA board agreed to the settlement because legal cases are subject to risk with no guarantee of winning, as well as expensive and can often take years to conclude.
He said the next steps are to draft a final settlement agreement with AWU, have it approved by the City Council and then draft an agreement with the MUD on using the $750,000 to repay a portion of the outstanding MUD debt.
“After this is all complete, our attorney will then contact the court to notify them of the settlement and withdrawal our complaint,” Crosby said.