OK, close your eyes and recall your high school economics class. Perhaps a painful memory, but one thing should have stayed with you. If demand for a good goes up, pricing usually follows. Same for the other side of the coin — when demand goes down, pricing typically does as well. But if the test question is on the economics of water, hold your pencil before you write down the answer.
Advocate reader Gene Davis, through an open records request, obtained information from the city shedding light on two interesting trends. The annual consumption of water by the citizens of Dallas has been going down. Hooray. The rates paid by the citizens of Dallas are going up—at a much faster rate. Ouch.
In 2002, Dallas residents used 75,369,918,000 gallons of water. Let’s call it 75.4 billion (that’s billion with a b). In 2014, Dallas residents used 63.7 billion. Hard to get your head around that many gallons, but over that 14 year time period, Dallas reduced water consumption by 16 percent. A laudable effort.
A similar review of water rates paid by Dallas residents show a different trend. While Dallasites have been reducing their consumption of water, the rates they have been paying have been going the other way. Water rates are tiered according to usage and divided between water and sewer charges. According to the city, the average use in Dallas is 8,300 gallons per month. At that level, the price in 2002 was $4.58 per 1,000 gallons, resulting in a monthly water and sewer bill of $38.04.
Ok, now hang with me. In 2014, the rate for the same user was $8.67 per 1,000 gallons, an increase of 89 percent! A water bill for a user of the average 8,300 gallons per month is now $71.96.
Bottom line, consumption of water has gone down 16 percent since 2002 and water and sewer rates have come close to doubling. Just seems puzzling the gap between those two trends is so large.
Terry Lowery, the Assistant Director of Business Operations of the City of Dallas Water Department, makes a stout defense. “Prior to 2001, we had several years of little or no increases in water and sewer rates. Beginning that year, we entered into a conservation program with three components — 1) we established a fourth rate tier two) changed all the rates to encourage consumption and 3) limited watering to certain times of the day. “
Well, that conservation program seemed to work because there has been a noticeable drop in consumption since 2002 as noted in the data from the Open records request. But why the continued rise in rates alongside a drop in water usage?
Terry volunteers a set of stats alongside ours. “The expenses for the City of Dallas Water Department are heavily weighted toward repairing and maintaining infrastructure. Unlike other City functions, only one-sixth of our budget is people. We have $5 billion worth of infrastructure, serving 400 square miles with 9,000 miles of pipe, 22 pump stations, three water treatment plants and two wastewater treatment plants. We are a 24/7 department keeping this infrastructure operating smoothly.”
On top of those infrastructure costs, she explains that there are significant expenses being incurred to insure the future availability of water. In addition to pricing that encourages conservation and maintains infrastructure, “We are paying $800 million dollars as our share of a 20 year, $ 2 billion project with Tarrant Regional Water District to construct 150 miles of pipeline from Lake Palestine as part of our plan to insure adequate water supply through 2070.” The 2070 plan contemplates other capital costs over time. So much of your current water bill goes to pay for things needed to have water available for your children’s children.
Lest you fret, Lowery noted one other thing. By charter, the revenue collected for the Water Department is entirely separate from all other city functions and never the budgets of the two shall mix or share.
So the answer to why such a large gap between a reduction in consumption and rising rates? It seems there is not really a meaningful connection between the two stats. Using less water isn’t really going to appreciably save on our water bills. Unapologetically, City of Dallas officials state that water and sewer pricing encourages conservation, maintains infrastructure and pays for improvements to insure a reliable supply of water.
Lowery does acknowledge that rate increases have been higher than normal during the past several years. Looking ahead, she forecasts rates rising in the 2-3 percent range, rather than the 7-8 percent from previous years.
Gene Davis and the rest of us will be watching. We’ll have some time on our hands since we can’t water our lawns as much.
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