August 23, 2023 Board Meeting Open Session Q&A
September 01, 2023
Vesta Luna: Why do we pay a $75 fee with no water and Lampasas and other towns pay less?
Kempner Water Supply Corporation (KWSC) is not associated with the City of Kempner. We are a member owned non-profit utility and all operational costs, loan payments, compliance upgrades, and repairs to aging infrastructure are funded by our members through the base rate and cost of water. All cities receive city taxes, which offsets their operational costs and allows them to maintain a lower rate of utilities for residents. KWSC is unfortunately not eligible for these taxes because we are a water supply corporation. Therefore, our rates must be higher to maintain operations and deliver water to all our members. In addition, you must consider how rural our system is in comparison to the density of a city. Think about a one-mile section of water line in one of our neighboring cities compared to the same size water line in the KWSC service area. In a city, there will be hundreds of people connected to that line and sharing the costs to keep it in operation. That is simply not the case in our extremely rural service area, which causes our operational costs to be higher on a per member basis.
David Seacrest: Why is there a big difference between Lampasas city water conservation measures and our water conservation measures for different stages?
Water conservation measures are set forth by a utility’s Drought Contingency Plan. No two utilities are exactly the same because they all have their own unique water supply operations, such as production methods, system capacity, population and demand. Therefore, the Texas Commission of Environmental Quality (TCEQ), who regulates water providers, requires that each water utility develop and implement a Drought Contingency Plan that is specific to their personal needs and operations. The City of Lampasas and KWSC have each independently assessed their specific needs and determined their own unique conservation measures, which have been submitted to and reviewed by TCEQ.
What is the depth of the new intake? 589’ or further?
Our top intake, currently being used, is at 597.67 feet elevation. Due to whirlpooling, we have approximately two feet remaining before we must shut that pump off and operate from the bottom intake. Prior to the newly installed extension, our bottom intake was at an elevation of 572 feet but was not operational due to deteriorating lake conditions. The new extension on the bottom intake has brought it up to an elevation of 582 feet, which gives us approximately 16 feet before whirlpooling starts and we lose the ability to pull water from the bottom intake.
How many members do we currently have?
KWSC currently has 5499 members.
How many projected members will there be in 5 years or 10 years? Has anyone looked into a study to determine if there are going to be a lot more people moving into the area?
Texas Water Development Board and Brazos River Authority have a state water plan that includes population projections. BRA is in the process of revising the most recent projections because a lot of the projections have been exceeded with the higher-than-normal range of migration to Texas over the last couple of years. KWSC’s membership population currently exceeds the 2030 estimate by 14.3%.
Based on the State’s study, KWSC should grow by approximately 320 members over the next 15 years. Based on prior experience, we think this number is shy of what the actual growth will be. For the last several years, KWSC has gained between 65 and 100 members annually.
The TWDB’s Region G Planning Group (Brazos Regional Water Planning Arear) prior and on-going regional plan can be viewed at <Region G Planning Group | Texas Water Development Board>.
Norman Best: What is a Co-op and why have I never received a dividend payment from KWSC?
A Co-op and non-profit organization differ in organizational structure and are incorporated by different state statutes. Both entities exist for the primary purpose of benefiting their members rather than shareholders, however they have different rules and legal requirements. The primary law applicable law to KWSC is codified as Texas Water Code, chapter 67. That law allows KWSC to distribute profit to its members but prohibits such distributions if the corporation has unpaid debts (TWC §67.008(c). KWSC has been indebted since it was created, remains indebted, and will remain indebted for the foreseeable future, so KWSC has never paid dividends and probably never will.
What do you do with the $75.00 members pay every month?
The $75 base rate paid monthly by members accounts for over half of the annual budgeted revenue, which is used to maintain operations and deliver water to all our members.
Do we have to pay extra for fixing the pipe that broke?
No extra charges will be passed on to members due to the broken pipe. These charges were covered by our operations and maintenance budget.
Or do we have to pay extra for digging deeper into Stillhouse Lake?
No extra charges will be passed on to our members for the intake extension, as these charges were paid out of our emergency reserve funds.
Did not call when water was disconnected and angry about fines.
KWSC has sent notices regarding the current drought conditions and warned of the repercussions of not following the requirements. Staff has gone above and beyond the requirements set forth in policy by sending out regular alerts, emails and even personally calling members, all but begging them to quit watering. After the personal phone call made the last week of July telling you irrigation was strictly prohibited by the Stage 4 Drought Conditions, a concerned citizen notified us your irrigation system was running in the middle of the day and sent pictures. For safety reasons, our policy does not require notification at the time of disconnection, and you had already received more than the single warning our policy does stipulate.
Dave Paskell: Why the difference in rates and restrictions?
See previously answered questions for more in-depth explanation, but the short answer is every water utility is unique. They have different populations, capacity requirements, operational expenses and revenue streams. KWSC charges rates and implements restrictions that are sufficient to maintain their operations and keep the water flowing to our members.
Why can’t we dig a well in Kempner and feed our people?
KWSC was established as a ground water system. It was determined in the late 1970’s there was not sufficient ground water to maintain the water needs of our members at that time, which was only about 1,000 members. This is when KWSC established their first surface water contract. We now have nearly 6,000 members. Unfortunately, the ground water availability is not in any better condition than surface water availability. In addition, groundwater would not be cheaper when you consider the cost of the well, the electricity, different treatment methods, blending issues, and the lack of capacity or volume you get from a well. There is some water in the Lampasas River basin that could be accessed with prior wells, which we have explored using in emergency conditions.
Who paid the bill for Dallas contractors to repair concrete line?
KWSC paid these charges from our operations and maintenance budget and Lampasas cost-shared their portion.
Where is the $75.00 going, to all your salaries?
The $75 base rate paid monthly by members accounts for over half of the annual budgeted revenue, which is used to maintain operations and deliver water to all our members. There is a lot more expense involved in keeping KWSC running than employee salaries. Salaries only constitute 13% of KWSC’s total annual expenses. The Board of Director’s are not compensated by KWSC. It is completely a volunteer position.
Where is the maintenance crew? I never see them driving around checking pipes or anything.
KWSC’s maintenance crew consists of only six individuals that handle all the work in the field. They do everything from samples, to flushing, running routes, reading meters, inspections, maintenance, and all repairs. We have over 400 square miles of pipe in the ground that spans across four different counties. With so much work to do and such a large area to do it in, it is unlikely you would see them in a centralized location on a regular basis.
Sam Parker: Other than what has already been approved, what is the Board’s position for new requests for water for any kind of new development?
While the KWSC Board would like to be able to keep our system small and rural, our hands are tied. Chapter 13 of the Texas Water Code requires a water utility to provide service to anyone who requests water and agrees to comply with the system’s approved tariff conditions for service, so long as they are within our designated service area. PUC rule at 16 TAC Section 24.161 also states, “every retail public utility shall serve each qualified service applicant within its certificated area as soon as is practical after receiving a completed application.” Unfortunately, this leaves us no way to deny service or to stop the growth from happening in our area.
Ricky Locklear: What is the long-term contingency plan for the water issue?
KWSC is taking every step possible to ensure the future of water for our members. We have numerous projects in the works to maximize our ability to serve our members continuous water. We just completed the extension on our own intake and are working diligently on interconnections with Bell County Water Control Improvement District (WCID) and the City of Copperas Cove. However, we only have control over contingencies that are within our scope of authority. Unfortunately, KWSC is reliant on surface water and has been for most of its existence. We have no bearing over the State’s water supply, either surface or underground.
Ricky Harper: Can we file an appeal to the base rate? If so, what is that process?
KWSC rates are on file with the Public Utility Commission of Texas (PUCT), as required by law. As a member-owned, member-controlled water supply corporation, in contrast to a for profit water utility, KWSC does not need prior approval from the PUCT for changing its rates. Rate appeals can be filed directly through PUCT in the form of a petition. The petition is required to be signed by ten (10) percent of the affected ratepayers and must be submitted to PUCT within 90 days of the rate change effective date. The exact instructions and a sample template for the petition can be found on the PUCT website. (www.puc.texas.gov)
A few short years ago, KWSC went through the litigation process due to a rate appeal. We spent countless hours and nearly $100,000 in professional fees to guide us through the process. Unfortunately, it takes a LOT of revenue to run KWSC and there are only about 6,000 people sharing in the cost to cover those expenses. In the end, the PUCT determined that KWSC rates were fair and equitable to cover all necessary operating costs, without unnecessary profits. Rest assured, KWSC uses every precaution to ensure that our rates are equitable to cover only necessary operating costs and even use the State recognized worksheet to determine what our rates must be to remain in compliance and provide continuous water to our members.
Have the grants that are available been applied for and how often are we applying?
KWSC has attempted to apply for grants when we had projects that could be covered within the scope of grant specifications. State and Federal grants are extremely project specific and typically very competitive. For instance, there are currently grants that can be applied for regarding agricultural water conservation, lead service line replacement, flood mitigation assistance, and drinking water system resilience and sustainability program, to name a few. As was reiterated by the TCEQ/PUCT representative that spoke at the end of our meeting, the vast majority of State and Federal funded grants are specifically designated for underserved or disadvantaged communities and others are only available for water districts, not water supply corporations. The median household income of our members is nearly double the allowable income to receive these grants.
What is the Board actively doing to be more fiscally responsible?
At KWSC, our commitment to fiscal responsibility is at the core of our operations and decision-making. All of the directors are members of KWSC and must also pay the applicable rates. We understand that being good stewards of our resources not only benefits our organization but also our community as a whole. Here are some of the key initiatives and strategies we have been working on to ensure that we continue to manage our finances efficiently:
Monthly Financial Reviews: Our board meetings dedicate significant time to reviewing and analyzing our financial performance. This allows us to closely monitor our revenue streams, operational costs, and capital expenditures. By maintaining this regular oversight, we are able to identify areas where we can make improvements and ensure that we are staying on track with our budgetary goals.
Committees Exploring Opportunities: Our board has established various committees that focus on different areas of opportunity, such as infrastructure upgrades, technology integration, and customer service enhancements. These committees play a critical role in identifying innovative solutions that not only improve our services but also optimize our financial investments.
Long-Range Planning: We understand the importance of planning for the future. Our board has been actively engaged in long-range planning discussions to ensure that we are prepared to meet the evolving needs of our community while maintaining a financially sustainable approach. This includes projections for population growth, technological advancements, and regulatory changes.
Investment in Efficiency: As part of our commitment to fiscal responsibility, we are consistently evaluating ways to streamline our operations and reduce unnecessary costs. This might involve implementing new technologies, optimizing our processes, or improving our energy efficiency measures. These initiatives not only save money but also contribute to our overall sustainability goals.
Transparency and Accountability: We believe that transparency is key to maintaining fiscal responsibility. We ensure that our financial reports are accessible to the public, allowing residents like yourself to stay informed about our financial performance. We have performed business case return on investment analysis into system expansion decisions and done comparative analysis of KWSC to our competitors (Corporations versus Government). Additionally, we hold ourselves accountable to the highest standards of ethical conduct in all financial matters.
We want to assure you that your concern about fiscal responsibility aligns with our board's values and priorities. We are dedicated to making informed decisions that benefit our community both in the present and for generations to come.
Where can past meeting minutes be found or how can we access information that has been discussed previously?
KWSC is subject to the Texas Open Meeting and Public Information acts. We are more than willing to provide anyone with information, including past minutes, if a request is made. All members are also welcome and encouraged to attend the meetings of the corporation to hear firsthand the information being discussed and voted on.
What determines the gallons for each tier?
Tiered rates are designed to promote conservation and discourage non-essential water use. KWSC’s Drought Contingency Plan (DCP) tiers were established according to State recommendations by the engineer and attorney that developed our DCP.
Where can we access the entire financial records for the last year?
As previously mentioned, KWSC is subject to the Texas Open Meeting and Public Information acts. We are more than willing to provide anyone with information if a request is made. In addition, financial reports are given at every Board meeting and our annual audit can be found on our website, as is required by law. (www.kempnerwsc.com)
What information do you have publicly available for resources for your customers when we aren’t satisfied with the service we are receiving?
KWSC provides 24/7/365 service, meaning “at any time, all year round.” A member not satisfied with the service they receive may call 512-932-3701. If the response is not satisfactory, the member may communicate with the general manager and if still not satisfied, address the board of directors during public comment at every monthly Board meeting. KWSC has a specific committee designated to handle member complaints if they are not happy with the service they have received. Finally, if still not satisfied, an informal complaint can be filed with the PUCT and KWSC will respond to the PUCT’s inquiry.
What are your responsibilities compared to the River Authority?
The responsibilities of KWSC and the River Authority have very little, if anything at all in common. KWSC is a non-profit corporation that treats and distributes water to its members. The Brazos River Authority (BRA) is a government entity created by the Texas Legislature, specifically to develop and manage the water resources of an entire river basin.
KWSC holds contracts with BRA, which gives us the right to receive up to a certain amount of water on an annual basis from BRA’s reservoirs. The cost of these contracts increases annually and currently costs KWSC almost a million dollars per year. This is not an optional expense for KWSC since KWSC currently relies on surface water.
Why is all this information so difficult for us to find?
KWSC does not try to hide anything from its members. The information you are seeking is not hard to find on our website. Every policy we are governed by and the agendas for every meeting we have are posted on our website. If there is something a member wants to know that is not on the website, all they need to do is ask. So long as the request does not violate the law, we are more than happy to provide any information requested.
Teresa Mitchell: What is the exact number of excessive use as far as the number of gallons to be shut off?
There is not an exact number of gallons used to determine excessive use for disconnection. KWSC realizes and understands that each household has a different number of occupants as well as different water needs. The only members that have been disconnected (which has been very few), have been those that are using water for non-essential things. We have only disconnected users with over 30,000 gallons of water use AND after verification by data log that they are irrigating. Lawn irrigation is specifically prohibited in our current drought conditions.
Marie Park: The mobile home park has only one meter for the entire park, pays $75.00 for each home in the park, being charged for water as if there was only one home, installing meters for each home is not an option per Kempner Water, base rate in Moody is $40 and Killeen bill is less than $100, it would be fair that tiered billing matches base rates, Kempner water double dipping at my expense, rent is not enough to pay water bill, having to take money out of personal money to pay bills for park, gave options.
KWSC follows the current Tariff guidelines in place for billing. We are looking into the disagreement you have with the tiered rates and will be having a committee meeting to address the situation.
David Luna: If you have preventative maintenance why did it take so long to get all this stuff done instead of having one time to come up here in front of you to gripe about all this stuff when you guys aren’t doing your job?
KWSC does perform a certain portion of preventative maintenance throughout our system. There is some aging infrastructure that we would love to be able to replace but it is cost prohibitive. Everything we replace, maintain or repair is paid for through the member’s monthly bill.
Janet Adams: Grants are available to water companies per google search. Have you utilized grants? Have you applied for grants? Do you have a grant writer?
Duplicate question, see answer above.
While there are a few water systems treating brackish groundwater, none of those projects are near this area, except for the small (100,000 gallons per day) system operated by the City Evant. In addition to the general costs for producing groundwater, there are the additional electrical and additional treatment costs for brackish groundwater. These costs exceed KWSC costs for obtaining and treating surface water from Stillhouse.
KWSC’s contingency plan is discussed above and includes the drought and conservation methods currently in place. You can find the full Drought Contingency plan on our website.
How are we moving into the future?
Kempner water supply corporation’s future is bright with being the second largest rural water system in the state. We look forward to providing water in an efficient, cost-effective manner.
Why is Georgetown getting water from us? We have livestock and really need the water for ourselves.
KWSC does not own the water in Stillhouse Lake. We hold contracts with the BRA, which gives us the ability to divert a certain amount of water out of the lake. We have no authority to grant or forbid Georgetown from receiving water from Stillhouse. We do not like it either, but unfortunately it is out of our control.
Why is Georgetown not pulling from Lake Austin or Lake Georgetown? Why do we have to give up our water?
This would be more of a question for BRA, but Georgetown does pull from their own lake. However, it is not enough water to sustain their growing population, so BRA built the pipeline from Stillhouse to Lake Georgetown to supplement their existing water source.
Norma Reynolds: What is the contingency plan? Global warming will only make the conditions worse. The only response I get is, this is Texas.
KWSC’s contingency plan is discussed above and includes the drought and conservation methods currently in place. You can find the full Drought Contingency Plan on our website.
What is the status on the intake extension? No updates since the 16th of August. Will we go back to Stage 3?
The intake extension is complete as of Friday, August 25, 2023. KWSC has provided updates twice per week for the last month. Please make sure you are signed up for alerts and view our website for additional information.
I am tired of hearing we have to hope for rain. It is your job to provide water, you work for us. I don’t know what you guys are doing. What are you for? Why don’t you give your reign over to the state because if you don’t have the resources and the motivation to do your job and help us out so we have water, step back and let the state take over because they have more resources and they probably can help us better.
KWSC works diligently to provide its members with continuous water. However, we can only provide water if it is available and unfortunately, we have no control over the scarcity of this valuable resource.
William Garnett: I’m asking each of you to keep your desire alive to force this board to give us 1,000 gallons a month minimum every month with your basic service.
The monthly minimum is based on KWSC’s fixed costs to maintain operations. If we included 1,000 gallons with the base rate, we would have to raise the cost of the base rate to cover the costs associated with treating and distributing that water. We know 1,000 gallons does not seem like it would be that much. In the big picture, that would be over six million gallons of water per month that KWSC would be “giving away” and the cost to produce the first thousand gallons is not any less than producing all the rest of the water.
Andrew Stifter: Itemized list of expenses? Is everything adding up?
KWSC’s budget and audit can be found on our website under the customer service tab. If you need more specific information, it can be obtained through a formal open records request.
All the communications we are getting are like a twitter post. It’s not professional and borderline insulting.
For those who stayed at the meeting, this was already addressed. Kempner Water Supply has a diverse demographic. One example, many of our members do not speak English as a first language. This can make informing the customer base in its entirety a challenge. When informing the public, we must focus on the midline of the demographic and ensure the language and tone are appropriate for the target audience. We would never intentionally insult anyone with notifications about our service, projects, or otherwise.
Kara Bathurst: What depth is the lower intake?
The new extension on the bottom intake has brought it up to an elevation of 582 feet, which gives us approximately 16 feet before whirlpooling starts and we lose the ability to pull water from the bottom intake.
What is WCID1 and how much benefit will the connection be versus the connection with Copperas Cove?
Bell County Water Control Improvement District (WCID#1) is a neighboring plant on Stillhouse Lake. They are a wholesale company and provide water to most of the local area (Copperas Cove, Killeen, Harker Heights, Nolanville, and Belton). Our connection with WCID#1 will benefit us when our plant is down for maintenance as well as provide additional system capacity. The connection to Copperas Cove will be an emergency connection. They receive water from WCID#1’s plant on Belton Lake so the water does come from a different source.
Can we review the board meeting budgets and where can we do that?
KWSC’s annual budget is located on our website under the customer service tab. It will be updated at the beginning of our fiscal year, which is October, with the budget for next year.
Patrick Roser: Complaining about lack of notice when shutting water off. Softener went bad. Please answer all questions to everybody.
See above question regarding all notices that have been provided over the last several months.
Synetta Peete: Moved here from Killeen and almost had a heart attack when I received water bills over $200. Do we have to pay fees and fines because Lampasas is asking for it? How are we going to do that? I want some understanding. Make me understand the concept behind all of this. I pay $200 to be part of a club that I don’t get any benefit from. Why does everyone have a high water bill?
KWSC is a member owned non-profit utility and ALL operational costs are funded by our members.
While members do not have to pay fees or fines because Lampasas is asking for it, there are costs associated with the Lampasas contract that are paid for through our rates. The Lampasas contract is a thorn in all our sides and will be until 2084, when it expires. Unfortunately, the current version of the contract was established 20 years ago, and it does not seem there was much consideration for the future. At the time the contract was signed, KWSC received their water from Central Texas Water Supply (CTWSC). Because of this, the contract was written based on Lampasas’ and our portions of CTWSC’s system capacity. The Lampasas contract states that KWSC pays 67% and Lampasas pays the remaining 37% of the charges billed by CTWSC. When our predecessors built the Kempner water treatment plant in 2010, KWSC relinquished their capacity in the CTWSC plant. However, there is one sentence in that contract that stuck us in the horrible situation we are in today. Page 24 of the City’s contract states, “This ratio shall not be adjusted, even if KWSC relinquishes its capacity in the CTWSC Water Treatment Plant, unless the City acquires KWSC’s capacity.” Lampasas declined to acquire KWSC’s relinquished capacity in the CTWSC plant. Therefore, until the contract expires, KWSC is required to pay 63% of the charges billed by CTWSC, for the exclusive purpose of providing the City of Lampasas water.
Barbara Best: Who determines the wages for the administrative people at the water department?
The KWSC Board of Directors determine the salary for the General Manager and budgets for the total annual salary paid to all employees. All other employees’ wages are determined by the General Manager.
How are the meters read, digitally or physically? When?
KWSC meters are read by radio frequency. The KWSC meter reader physically drives our entire service area, at a slow speed and the radio transmitter in his truck picks up the reading of each meter. This is done monthly and is generally completed by the 18th.
Leona Cooper: My appliances look like the container that the gentleman brought. After all this work is done will we have better water than that?
The quality of the water that KWSC supplies to its members complies with applicable regulatory requirements. The calcium and mineral build up in appliances results primarily from the transmission and distribution system, and not from the treated surface water, so addressing this issue is cost prohibitive. The water we will be receiving from the ongoing projects is from the same lake and will contain all the same minerals.
Scott Mullican: I would like to ask the Board to bring in a third party to analyze the possibility of shutting down the plant and diverting the funds to replace aging concrete lines and valves.
We have not considered this and why would we shut down our plant? We know what kind of costs it would take to replace the transmission mains and the projected costs are astronomical, not to mention the costs associated with purchasing water from another source. These costs would all have to be borne by our members.
Michael Reynolds: Not happy about stage 4 drought restrictions. You changed the criteria. Put something out and stick to it.
KWSC has sent notices regarding the current drought conditions and warned of the repercussions of not following the requirements. KWSC staff has gone above and beyond the requirements set forth in policy by sending out regular alerts, emails and even personally calling members, all but begging them to quit watering. If we strictly follow the drought plan, many more members would have their water cut off by now. To be realistic all that needs to be done is to stop irrigating lawns and we would have to ask for no more reduction than that. 50-70% of our drinking water was going on the ground.