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MUDs still fighting city over water bills

Thursday, June 9, 2016 by Jo Clifton

The long-running argument between the city of Austin and four municipal utility districts continues, with lawyers for the North Austin MUD No. 1, Northtown MUD, Wells Branch MUD and Travis County WCID No. 10 claiming Austin Water is again overcharging their clients.

Austin Water officials say they are charging the MUDs what they must charge in order to recover their revenue requirements and that the charges are in line with a January order from the Public Utility Commission of Texas.

The PUC ruled at the end of 2015 that Austin Water owed several million dollars in restitution to the four MUDs. The city says that the order from the PUC included a provision allowing the city to collect infill and infiltration adjustments.

Austin Water Assistant Director David Anders explained that infill and infiltration, known as I&I, consists of water that gets into the sewer system, typically due to rainfall, and makes its way back to the city’s water treatment plant. The plant must treat that water but does not charge any particular customer for that treatment. The argument between Austin Water and the MUDs is over what is called an “I&I flow adjustment” of 11.7 percent.

According to Anders, the PUC ordered Austin Water to include that charge when calculating rates for the Municipal Utility Districts. Those MUDs strenuously disagree and have filed what amounts to a protest at the commission.

Randy Wilburn, attorney for the MUDs, sent the following statement to the Austin Monitor: “The City of Austin owes North Austin MUD #1, Northtown MUD, Wells Branch MUD and Travis Co. WCID #10 $8.5 million in restitution.” In addition, he said that Austin Water has spent nearly $2 million in court costs and legal fees.

Wilburn is asking the PUC to order Austin to pay about $1.36 million more than the nearly $3.8 million Austin believes it owes under the PUC’s January order.

He concluded, “The Austin Water Utility staff’s attempts to spend our districts into submission deserves a hard look from the Austin City Council and the taxpayers of the city, especially in light of the PUC’s strong legal position in declaring Austin’s water and wastewater rates to be illegal.”

According to the city’s response to the MUDs’ filing, what the utility districts are asking the commission to do is “to require the city to recalculate refunds … in a way that would deny the city recovery of the ordered revenue requirements consistent with” the PUC order.

The PUC staff has filed its response to both the city and the MUDs. Based on their review of the pleadings, the commission staff members say they do not know whether the dispute between the city and the MUDs is a legal dispute, a factual dispute or both. According to the timeline provided by PUC staff, the parties will be filing documents throughout June and most of July.

The attorneys for the MUDs have urged the commission to deny the city’s refund calculation and order the city to pay more. In addition, they argue that the commission staff is wrong and that there should be no further proceedings.

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