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Financial Fallout Facing Denton County

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When going through your monthly bills, do you ever ask yourself, why is my water bill so high?  Are we using too much water? This is an ongoing question in our household, as I routinely ask “Honey, have you been messing with the sprinkler system?”

Since serving on our Council, I have learned that instead of asking my wife this question, we would be better served posing this question to our wholesale provider.  If you are a resident of Denton County, certainly you gasp when opening your water bill as our wholesale water costs are among the highest in North Texas.  The cost of water in Denton County has been increasing at a rate that is much higher than that of inflation, and if responsible decisions are not exercised, you, as a resident of Denton County, haven’t seen anything yet.  The worst is yet to come.

The Upper Trinity Water Regional Water District supplies water to many municipalities and special water districts throughout Denton County including Flower Mound, Aubrey, Sanger, Point Pilot, Corinth, Celina, Argyle and the Bartonville Water Supply Corporations to name a few and many more throughout our region.  There are a total of 28 members of the Upper Trinity Regional Water District. Flower Mound is the largest Upper Trinity customer with a subscription that is more than 40 percent of the Upper Trinity’s total capacity. The second-largest customer is Corinth, which subscribes to 10.5 percent of the Upper Trinity’s capacity.

This brings us to mid-January 2013, when the Upper Trinity goes before the Texas Commission on Environmental Quality (TCEQ) process for consideration of a permit to build Lake Ralph Hall, a lake that the Upper Trinity estimates will cost $275 million in today’s dollars.  An independent analysis of the Lake Ralph Hall project has estimated the cost could be as much as $450 million.  To put this in perspective, the Upper Trinity currently has more than $290 million in debt, and the lake will be almost entirely financed with additional debt.

Flower Mound has two sources of water, Dallas Water Utilities, where we subscribe to 27 percent of our water and the remainder is purchased from the Upper Trinity.  When a municipality purchases water there are two costs that are applied, a fixed cost for the amount subscribed, and a variable cost. Below illustrates what Flower Mound is charged to purchase water on a wholesale basis:

Fixed Cost per 1 million gallons subscribed  –  Variable Cost per 1000 gallons purchased

Dallas Water District  –  $200,000 –    35 cents
Upper Trinity Water District  –  $370,000  –   86 cents

That is correct, currently the Upper Trinity is approximately twice the cost of Dallas Water Utilities; and you guessed it, when Lake Ralph Hall is built it is only going to be more expensive.

Since the Town of Flower Mound is the largest subscriber, many of the smaller municipalities and districts have allowed Flower Mound to carry the water and be the most vocal challenger to Lake Ralph Hall.  However, make no mistake; Lake Ralph Hall has the potential to cripple every member of the Upper Trinity Regional Water District if unchecked. 

In November, I as Mayor went before the Upper Trinity Board and apologized for any past animosity between the Town of Flower Mound and the Upper Trinity, and said we would like to work together and would be willing to drop our opposition to Lake Ralph Hall.  However, to drop our opposition we requested,  before the Upper Trinity Board expends millions of dollars more on Lake Ralph Hall, that they would exercise due diligence and explore the availability of a more economical source of water.  If one is fiscally responsible, that seems like a reasonable request.

Currently, Dallas Water Utilities is in the process of doing multi-decade water supply planning. We believe with the infrastructure currently being built which will connect Lake Palestine to the Dallas Water Utilities system (a lake that will have a capacity that is 350 percent greater than Lake Ralph Hall) that Dallas Water Utilities will be able to supply water not only to Dallas, but also Denton County for many, many years to come.

Additionally, Flower Mound requested that the Upper Trinity Board establish parameters of absorbing their current capacity before spending hundreds of millions for more supply.  The Upper Trinity is a long, long way from being at its peak capacity. 

Do you, as a customer of the Upper Trinity, think it is unreasonable to request the Upper Trinity Regional Water District see if a more economical source of water is available before spending hundreds of millions of dollars?  Is it unreasonable to ask the Upper Trinity to establish parameters so that they have additional customers to pay for this lake, instead of forcing current customers to pay for something that may not be needed for 30, 40, or 50 years?  I would think the Board would have a fiduciary responsibility to all customers, and would certainly want to explore such a suggestion from their largest subscriber before burying everyone in the district in debt.

Instead, the Upper Trinity Board said we are not interested in your proposal and have nothing further to say.   

Yes, that is correct, and I was just as speechless as you when informed of their response.  I’m still confused as to why they would not want to ensure a more economical source is not available before issuing a mountain of debt on the backs of their customers.

Several times I have been asked, “Tom how can you question more water? Isn’t that like being against baseball and apple pie?”  My response has been, “I’m not opposed to increasing our supply, but I am opposed to being forced to pay champagne prices for more water, especially when it may not be necessary.”   Flower Mound does not want to oppose Lake Ralph Hall, but we do seek financial accountability from the Upper Trinity Regional Water District.  We would like to see Lake Ralph Hall built when it is needed, not just a want. 

Additionally, what would the Lake’s namesake, Congressman Ralph Hall, long a fiscal conservative, think of a Lake bearing his name, one built on a tall slope of debt, when all possible alternatives have not even been fully explored.

If you are concerned about your utility bill; one that is already substantial and beginning to snowball, I would encourage you to contact your local elected officials who appoint the representatives to the Upper Trinity Board of Directors, and encourage them to act in a fiscally responsible manner.

 

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