Most Commonly Asked Questions (and answers) Regarding Recent Rate Increase.

We at KWSC understand the concerns for our members and to be transparent in the matter of the recent rate increase, we have decided to address your questions directly. Some of the concerns and questions that we have seen expressed in various outlets are included in this informational email.

1. What were the reasons for the General Manager's 7% merit-based raise, and what accomplishments support this decision?

Bruce holds a position in a highly regulated industry requiring specific licensing and adherence to strict time in position. His merit-based raise reflects both a market adjustment aligning his compensation with similar roles elsewhere and recognition of his leadership qualities. Bruce has consistently created and updated a long-term strategic plan, successfully categorizing projects according to compliance, quality, and capacity needs. He has demonstrated exceptional negotiation skills with external partners, resulting in advantageous outcomes for the company. Overall, Bruce continues to be a valuable asset to our organization.

2. The board has voted themselves 100k salaries, there is corruption – someone is benefiting from the increase.

Board members serve on a voluntary basis and do not receive a salary. Decisions regarding pay increases are determined collectively by the board, and the general manager does not participate in decisions about their own compensation. Although payroll represents a substantial component of the budget, KWSC has reduced expenditures on professional services and employee development to essential levels. The organization operates with a lean team whose members demonstrate dedication and diligence in their work.

3. All of this money and the water is still bad!

KWSC acknowledges that the water clarity can be improved. The lake presents treatment challenges, with several areas experiencing elevated manganese levels, and KWSC is among those affected. Ideally, a clarifier would have been installed to pre-treat the water prior to it entering the plant; however, this was not part of the facility's original design due to the historically higher quality of the lake water, and its addition now would entail significant costs beyond current budgetary constraints. To address these issues, KWSC has adopted new maintenance strategies which have enhanced operational efficiency, and staff diligently seek practical solutions to further improve water quality. We recognize members' concerns regarding discoloration, and while remediation may take time, KWSC continues to comply with TCEQ regulations and collaborates with TCEQ to identify opportunities for ongoing improvement.

4. Why do they need these expensive trucks?

The board completed a comprehensive assessment of the fleet, considering vehicle condition, mileage, and maintenance requirements. As part of the 2024-2025 budget year, authorization was given to replace two vehicles, both of which were procured below the allocated budget. Plans are in place to acquire an additional vehicle during the 2025-2026 cycle. Two vehicles have recorded nearly 200,000 miles each, while another has reached 244,000 miles, reflecting their extensive use for daily site visits, including those in remote areas. While the selected replacements carried a higher initial cost compared to alternatives, they were chosen for superior fuel efficiency and extended service life.

5. Why is the increase necessary, we already pay a lot of money for the water?

Costs for KWSC and the broader economy continue to fluctuate, impacting both our members and the company. While we absorbed several significant cost increases last budget year without adjusting rates, this year it has become necessary to implement an increase to meet budgetary requirements. For transparency, here are key factors influencing our budget: utilities have increased by 2.6% this year; insurance costs are projected to rise by approximately 12.7%; our payments to CTWS are estimated to increase by 2%. Additionally, reserve fees—covering the amount of water permitted from the lake—rise annually, with this year's increase from the BRA set around 6.95%. Our annual principal and interest payments total $2,550120.

Additionally, the board has authorized funding for depreciation. In prior years, depreciation was not fully funded, resulting in insufficient resources to replace equipment and parts at the end of their useful life. This new approach will enable the company to proactively replace assets as planned, rather than having to secure funds at the time of replacement.

6. New builds should be halted until the water quality can be fixed, more builds just increase the costs.

KWSC acknowledges the concerns regarding new developments and the potential impact they may have. Legally, we are not permitted to deny new build requests if water service can be provided. An engineer conducts a study which is submitted to KWSC for review. If it is determined that KWSC can provide water, we are required by law to do so. Builders are responsible for any necessary infrastructure costs associated with supplying water to new constructions. KWSC is actively participating in the Central Texas Water Alliance to address long-term regional water needs. Additional meters will help distribute costs among a larger membership base.

7. What about grants? They keep missing the deadlines.

As a private water company operating across multiple counties with a median income exceeding grant eligibility requirements, grants are generally not a feasible option. However, members may review available opportunities independently by consulting the following resource: Water Infrastructure Funding Database — Texas Water Foundation.