Paul Robbins, Austin, emails (excerpted), responses to PolitiFact Texas, March 27-28, 2012

March 27, 2012 8:58 pm

Paul Robbins

Austin, TX

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Below are responses to your questions.

1. You said you were trying to verify the quote by Brigid Shea in the Statesman: our water rates have increased by 100 percent and we now have the highest water cost of the top 10 cities in Texas.

According to the chart in my report in Section 8, this is true.

In my report, I was much more specific: Austin has the highest water, wastewater, and combined water/wastewater costs per unit of the 10 largest cities in Texas...

Maybe Shea was cramped for space.  Many people see their "water bill" as the total of water and wastewater.  You might want to contact her for more detail.  But the statement, as written, is true.

2. You asked for a copy of the AWU rate study for 2011.

It is attached, along with 2012.  The methodology is quite different.  AWU left two of the top 10 Texas cities out of the analysis (Laredo and Plano), as well as most of the Austin suburbs in my report.  It did not survey the Industrial Class.

AWU also looked at specific amounts of consumption per customer.  I looked at entire "all in" revenues and consumption.

3. You asked if my report "distorted" the costs and rank.

The report's stated purpose was to compare all costs and all consumption to determine the average retail costs.  Some might call this a "weighted average."  I went out of my way to show why this was different than the rate comparisons done by Austin Water Utility, even going as far as to show the different outcomes of 3 methods of comparison (in Section 2 of the report).

If you are in the Austin Residential rate class and consume relatively low amounts of water, your costs will be below this weighted average because of Austin's steeply tiered rate structure.  In this case, Austin will rank more favorably compared to other cities.  But that was not the stated purpose of my report.

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The motivation for my report is to shine a light on Austin's extremely high water/wastewater costs.  It is my hope that exposing these high costs will make the utility more accountable and responsible.

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Paul Robbins

March 28, 2012, 1139 pm

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I will comment point-by-point.  …

Regarding topic #1

The utility has just admitted I was right if the method in my report is used: We think that Austin Water likely does come out the highest under Mr. Robbins’ metric

Even under the utility's preferred method, Austin's cost in FY 2012 and FY 2011 are at the higher end.

Regarding topic #2

Think of it this way: If Austin's overall costs (discussed in my report) were lower, the cost of each tier (reflected in AWU's report) would be lower.  Then Austin would compare more favorably to other cities under the utility's own preferred method.

Also note that the Residential class is the only class in Austin that has a tiered rate structure.

Regarding topic #3

I have been truthful and transparent in my method.  Even the utility concedes that I am probably right if you look at rates in this manner.  Then I went further to discuss why Austin's cost might be so high.

A detailed benchmark study comparing Austin to these 23 other cities should be done.  I suggested this in Section 10.  It was beyond my ability and time to do more with this report.  (Human cloning is still illegal.)

Austin should compare itself with indicators including debt per capita, employees, pay-level, energy use, energy cost, percent of transfer to General Fund, consumer and environmental programs, annexations, capital recovery fee charges, etc.

At this point in time though, I would suggest an independent consultant do the work, not AWU.  The agency is obviously too defensive to be objective.

Below are my responses to the comments on the PowerPoint presentation.  I have seen most of these slides before, some numerous times.

 

We think that Austin Water likely does come out the highest under Mr. Robbins’ metric, that is when water and wastewater costs are combined and then divided by the total number of gallons. As he notes, however, he is the only one (that he or we know of) who has done this type of calculation.

Does that mean I'm wrong?

Slides 6-8 compare Austin Water’s residential rates at different levels of usage. As you can see the rate increases dramatically as usage increases. This is a conservation based rate structure and its utilization is not adequately reflected under the methodology used by Mr. Robbins.

 

The was nothing inadequate about it.  I ignored tiers intentionally.  They did not reflect the stated purpose of my report.

 

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Can AWU point to one place in my report where I suggested doing away with tiered rate structures?

 

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Water

Secured water supply. Invested $100M in 1999 to prepay for raw water and reserve Highland Lakes water through 2050

 

Noted in my report.  This does not represent a huge part of AWU debt.  And other utilities are also having to secure future water supplies.  For instance, it is my educated guess that San Antonio has made large investments in this direction.

 

Water Treatment Plant 4 is slated to open in 2014, increasing reliability and redundancy while also dramatically lowering energy use in getting water to Austin’s northern and northwestern Desired Development Zone.

 

Money spent on WTP#4 to date is noted in the report.

 

The plant will lower energy use, but not dramatically.  And it will raise debt noticeably.  It has been my contention that Austin could have delayed this debt for a considerable period with better conservation programs.

 

Manages 39,000 acres of Wildlands for water quality and endangered species protection.

 

Noted in my report.  It is a small share of the total budget.  San Antonio also has such a program.

 

Wastewater

Aggressive expansion of the reclaimed water system, including the 51st Street Tank, with a Montopolis tank to come next, and reclaimed service recently extended to ABIA.

 

Noted in the report.  It is not a great share of the debt.  San Antonio started its system some time ago and its utility reuses a much greater percentage of its wastewater than Austin does.

 

$4.2 million in this year’s budget for Green Choice to reduce the utility’s carbon footprint and address the water-energy nexus.

 

Noted in my report. Again, it is not a large percentage of the budget.  The cities of Houston and Dallas also buy green power, though not as great a share of their total consumption.

 

All AWU environmental programs, including conservation, Wildlands, and GreenChoice, collectively make up 4% of the total budget (Section 9.6).

 

In the 1980s the City did not keep up with growth and one result was the overburdened Williamson Creek Wastewater Treatment Plant and very dirty discharge into the Colorado River. Beginning in the late 1980s the utility made major investments to build a new plant and improve the other to the point that Austin Water now far exceeds its permit requirements -- and the river downstream of the sewage discharge is rated Exceptional under EPA standards.

 

All water utilities must adhere to minimum EPA standards.  If AWU can break out the extra cost for its higher standards that exceed EPA rules, the utility might make a better case than it has made to date.

 

(I am partially confused as to why AWU continues to imply that one of the most embarrassing episodes in its history is part of a model program.  Back in 1976, voters approved bonds to build a new wastewater treatment plant.  AWU did not spend the money for 8 years.  It only began to correct the sewage overflow problem when barraged by lawsuits.  The detailed story is in back issues of the Statesman, most of which I have recently reviewed for an article I was trying to write.)

 

More recently, under an EPA order, Austin Water spent more than $400 million to fix leaky sewage pipes all over the service area and to move pipes from creek beds.

This refers to the Austin Clean Water Program.  It is noted in my report.

Again, all utilities must comply with EPA standards.  It is likely that there were other Texas water utilities required to make similar repairs, which probably caused rate increases in these cities as well.

That concludes my response.  

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Paul Robbins