Plano Star-courier > News
Conserving water: dollars and sense
By Jon Vanderlaan, jvanderlaan@acnpapers.com
Plano official says contract hurts conservation efforts
Water use in the 13 member cities of the North Texas Municipal Water District is regulated by a single contract - the terms of which may actually discourage water conservation.
Plano Assistant City Manager Mark Israelson, City Manager Tom Muehlenbeck and NTMWD directors Shep Stahel and Jerry Yancey will meet this week to discuss the possibilities of a new contract with the district that will reduce costs to the city and encourage more water conservation.
"We've been given some data from the North Texas Municipal Water District that we've taken a look at," Israelson said, "and we just wanted to present our views on that data and what our findings were. At this point, it's more about talking with our board members about our observations and really looking at that data."
The water conservation conflict
Israelson said because the contract requires the city to purchase the 26.7 billion gallons of water, it creates conflict between water conservation efforts and using all of the resources for which the city has paid.
"That's the challenge we face in looking at the situation; we haven't met our minimum in quite a few years," he said. "So I feel we have gone above and beyond in achieving sustainability.
"In doing that, we have lost revenue and increased costs."
But Jim Parks, director of the NTMWD, said while the contract gives cities the capacity to use the water, it does not reflect the amount of water cities actually use.
Because of this, he said the contract is similar to buying a car. Although the person buying a car may not use all the seats during each drive, the owner pays for the capacity to hold that many people.
Israelson said despite that agreement, the city is looking for alternative solutions so it does not have the conflict between water conservation and utilizing its resources.
"We're here to provide and sell water, but we want to do so as wisely as we can," he said. "So it is a balancing act between the two elements."
Why the contract hasn't been changed
Parks said the contract, which has been the same for the last 55 years, uses the previous peak year of water usage as the base for the capacity each city is required to pay.
If a city uses more than its paid capacity, it is charged extra; but the capacity for the next year is increased to reflect that additional usage.
The current contract also allows for a stabilization of prices, Parks said, contrary to the fluctuation of prices each year that would occur if a city were to pay for its exact water usage.
Even if a city found a more beneficial rate to propose to the district, he said all 13 member cities would have to agree on the contract - a very difficult task, especially considering the contract may not benefit all of the members.
"At the end of the day, how do you convince all 13 member cities to change a contract where I pay more so you can pay less?" he said. "There's no other structure that we have found that will lower the price for all 13 member cities."
Shep Stahel, one of the Plano representatives on the NTMWD board of directors, said because the city used so much water during a 2002 drought, the number of units Plano is required to purchase rose from 22 units to 27 units.
When the drought ended, however, the city began using much less than that.
"The question is, why should Plano pay for 27 units of water when they're [using less]?" he said.
Despite Israelson's claim that the contract discourages conservation, Stahel said it encourages it by offering a rebate on the cost of service when a city does not use the facilities to full capacity.
That rebate is only about half of the total cost, though, as the city still pays for the facilities.
Stahel likened the capacity cost to an insurance policy, allowing cities some buffer room if they use more than water normal.
Parks said cities will use more water during a dry year than a wet year, and because those facilities are needed during dry years, they still need to be paid for during wet years.
If the cities owned the facilities themselves, he said they would be in the same position of always having to pay for facility maintenance, despite their not always using the capacity.
Where Plano goes from here
About five years ago, Stahel said, the NTMWD analyzed some alternative contract methods at the request of Plano. The district went to the city with 10 different financing plans, but none of them solved the problem.
"All 10 plans ultimately came to the same conclusion," he said. "And that is you still have to pay off the bondholders, and you still need some excess capacity that's available in the event of a drought."
Stahel, a former member of the Plano City Council, said city officials have discussed the contract before, including how it relates to water conservation.
Because conserving water is necessary in today's environmentally conscious world, he said, it was never a question of whether to conserve water - despite the capacity that was not being used.
"The feeling of the board was, 'Let's promote water conservation because it's the sensible thing to do,'" Stahel said. "And if the opportunity arises down the road to successfully modify the contract to a different approach, let's try that. But we're not going to hold on water conservation while we consider our contractual options."
Parks said as long as the district's fixed costs are met, any of the rate models work for the nonprofit organization.
Because its board is made up of directors from the member cities, NTMWD is not a power controlling the cities; instead, the cities control what happens with the district.
However, an affirming vote from all 13 cities is required to change the contract.
Parks said the best thing cities can do is conserve water during the peak months and obtain the rebate available to them.
"What conservation does is help to minimize the tendency of the population to use large amounts of water during extremely dry periods versus extremely wet periods," he said. "All we've ever asked is that people limit wasting water."
In a perfect world, Stahel said, the city wouldn't have to pay for the capacity it was not using, but it would work to modify the contract so all cities agree - and Plano would not lose as much on its side of the deal.
Israelson said while he understands Parks' position, it presents a challenge to Plano when the city does not meet its minimum usage.
"The city is still paying for 26.7 billion gallons, whether we take it or not," he said. "And we're still being asked to conserve off of that, even though we're having to pay for those volumes."
Water use in the 13 member cities of the North Texas Municipal Water District is regulated by a single contract - the terms of which may actually discourage water conservation.
Plano Assistant City Manager Mark Israelson, City Manager Tom Muehlenbeck and NTMWD directors Shep Stahel and Jerry Yancey will meet this week to discuss the possibilities of a new contract with the district that will reduce costs to the city and encourage more water conservation.
"We've been given some data from the North Texas Municipal Water District that we've taken a look at," Israelson said, "and we just wanted to present our views on that data and what our findings were. At this point, it's more about talking with our board members about our observations and really looking at that data."
The water conservation conflict
Israelson said because the contract requires the city to purchase the 26.7 billion gallons of water, it creates conflict between water conservation efforts and using all of the resources for which the city has paid.
"That's the challenge we face in looking at the situation; we haven't met our minimum in quite a few years," he said. "So I feel we have gone above and beyond in achieving sustainability.
"In doing that, we have lost revenue and increased costs."
But Jim Parks, director of the NTMWD, said while the contract gives cities the capacity to use the water, it does not reflect the amount of water cities actually use.
Because of this, he said the contract is similar to buying a car. Although the person buying a car may not use all the seats during each drive, the owner pays for the capacity to hold that many people.
Israelson said despite that agreement, the city is looking for alternative solutions so it does not have the conflict between water conservation and utilizing its resources.
"We're here to provide and sell water, but we want to do so as wisely as we can," he said. "So it is a balancing act between the two elements."
Why the contract hasn't been changed
Parks said the contract, which has been the same for the last 55 years, uses the previous peak year of water usage as the base for the capacity each city is required to pay.
If a city uses more than its paid capacity, it is charged extra; but the capacity for the next year is increased to reflect that additional usage.
The current contract also allows for a stabilization of prices, Parks said, contrary to the fluctuation of prices each year that would occur if a city were to pay for its exact water usage.
Even if a city found a more beneficial rate to propose to the district, he said all 13 member cities would have to agree on the contract - a very difficult task, especially considering the contract may not benefit all of the members.
"At the end of the day, how do you convince all 13 member cities to change a contract where I pay more so you can pay less?" he said. "There's no other structure that we have found that will lower the price for all 13 member cities."
Shep Stahel, one of the Plano representatives on the NTMWD board of directors, said because the city used so much water during a 2002 drought, the number of units Plano is required to purchase rose from 22 units to 27 units.
When the drought ended, however, the city began using much less than that.
"The question is, why should Plano pay for 27 units of water when they're [using less]?" he said.
Despite Israelson's claim that the contract discourages conservation, Stahel said it encourages it by offering a rebate on the cost of service when a city does not use the facilities to full capacity.
That rebate is only about half of the total cost, though, as the city still pays for the facilities.
Stahel likened the capacity cost to an insurance policy, allowing cities some buffer room if they use more than water normal.
Parks said cities will use more water during a dry year than a wet year, and because those facilities are needed during dry years, they still need to be paid for during wet years.
If the cities owned the facilities themselves, he said they would be in the same position of always having to pay for facility maintenance, despite their not always using the capacity.
Where Plano goes from here
About five years ago, Stahel said, the NTMWD analyzed some alternative contract methods at the request of Plano. The district went to the city with 10 different financing plans, but none of them solved the problem.
"All 10 plans ultimately came to the same conclusion," he said. "And that is you still have to pay off the bondholders, and you still need some excess capacity that's available in the event of a drought."
Stahel, a former member of the Plano City Council, said city officials have discussed the contract before, including how it relates to water conservation.
Because conserving water is necessary in today's environmentally conscious world, he said, it was never a question of whether to conserve water - despite the capacity that was not being used.
"The feeling of the board was, 'Let's promote water conservation because it's the sensible thing to do,'" Stahel said. "And if the opportunity arises down the road to successfully modify the contract to a different approach, let's try that. But we're not going to hold on water conservation while we consider our contractual options."
Parks said as long as the district's fixed costs are met, any of the rate models work for the nonprofit organization.
Because its board is made up of directors from the member cities, NTMWD is not a power controlling the cities; instead, the cities control what happens with the district.
However, an affirming vote from all 13 cities is required to change the contract.
Parks said the best thing cities can do is conserve water during the peak months and obtain the rebate available to them.
"What conservation does is help to minimize the tendency of the population to use large amounts of water during extremely dry periods versus extremely wet periods," he said. "All we've ever asked is that people limit wasting water."
In a perfect world, Stahel said, the city wouldn't have to pay for the capacity it was not using, but it would work to modify the contract so all cities agree - and Plano would not lose as much on its side of the deal.
Israelson said while he understands Parks' position, it presents a challenge to Plano when the city does not meet its minimum usage.
"The city is still paying for 26.7 billion gallons, whether we take it or not," he said. "And we're still being asked to conserve off of that, even though we're having to pay for those volumes."
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