Hutto, Texas — The City of Hutto and Manville Water have negotiated new terms to their water contract which results in reduced rate for all water customers served in Hutto.
In the new agreement, Manville Water designates Hutto as ‘most favored nations’ status, meaning Hutto will receive the lowest price Manville offers to any other wholesale customer and the Hutto rate will never be higher than any other customer served by Manville.
The City announced at Thursday evening’s City Council Meeting that they are giving citizens a “no payment rate holiday” for the month of April, which will be reflected in their May bills as a credit.
“This is a huge win for the citizens of Hutto as not only the water contract costs are significantly reduced and the City is operating more efficiently, but the City will pass on a credit as a one month rate break to all water customers representing essentially an 8.33%, or 1/12 reduction for water customers,” said Odis Jones, Hutto City Manager.
“The City Council believed it was important to look holistically at our water service and provide all Hutto utility customers a credit for the month of April for their water usage,” said Mayor Doug Gaul.
The City has the ability to draw up to 820,000 gallons per day, with a premium charge for extra capacity only charged after 600,000 gallons per day. Other significant changes to the contract include new gallon rate, minimums daily reserve, and reduced term, as follows:
Previous Manville Contract New Manville Contract
Term 40 years 15 years
Type Take-or-Pay Contract Reserve Capacity Contract
Rate $4.20 per thousand gallons $3.50 per thousand gallons
Minimum Daily Reserve 500,000 gpd 200,000 gpd
These changes will result in an annual contract savings of $511,000 and a savings of $12.775 million over the life of the contract.
In the past 18 months, the City has addressed utility costs by using a four-pronged approach. The City terminated the burdensome take-or-pay contract from the Heart of Texas Water Contract. The City purchased the Heart of Texas Water assets to ensure the future of the City of Hutto water supply and save more than $150 million over the 40-year term of the contract while preventing future water rate spikes that were called for in the HOT water supply contract. The City has also been actively recruiting a more diverse customer base so commercial and industrial customers can help to relieve the waters costs of residential customers.
This act of renegotiating the Manville Water Supply contract will successfully reduce the cost and capacity at no additional charge and with significant cost savings to the City and its citizens.
“Three years after the utility fund was insolvent due to these long-term exorbitant water contracts and the 2014 decision to build a sewer plant without a way to pay for it, I am proud to say that our City has restored the fund in a manner that allows us to provide some relief to our citizens,” added Jones.
Community Impact - Water Contract Renogiated