Hani Tohme, acting director of utilities, explained the numbers to the Port Arthur City Council at their Tuesday morning meeting how things got in this condition and what it will taken to straighten them out.

Revenue projections are based on up to date revenue in 2018 and actual 2016 revenue. Expenditure projections are based on up to date expenditures in 2018 and found savings.

Projections of revenue and expenditures can change based on unprecedented events, such as hurricanes, hot summers, major infrastructure failures, etc.

The 2018 adopted budget is as follows:

• Operations $18,080,228
• Debt, fees, etc. $7,590,270
• Budgeted expenditures $25,670,498
• Budgeted revenue $24,015,200
• A budget deficit of -$1,655,298

Tohme has since updated the 2018 budget. Some of the savings found and implemented keep 19 vacant positions for five months for $600,000; forgoing a water study for $450,000; operational savings of $300,000; savings on raw water cost $200,000; forgoing a rate study of $125,000; building maintenance savings of $100,000 for a total savings of $1,775,000.

Projected expenditures are $23,895,498; current projected revenue is $19,800,000, projected deficit after savings is $-$4,095,498 and uncaptured metering revenue of $200,000 for a total deficit to recover -$3,895,498.

The Cheniere LNG project was originally projected to be $6 million a year for the city to supply water to the plant but is actually $3 million less than budgeted.

The water utilities department findings and ongoing activities since Tohme’s presentation at last month’s regular City Council meeting show that:

• Domestic meters reading at 85 percent accuracy
• The city has 24 percent water loss based on the Texas Water Development Board standards
• Reviewing all accounts for billing accuracy
• Checking large meters for accuracy
• An offer made to the construction manager to lead pipe-bursting efforts
• Applying with the Texas Commission on Environmental Quality for the city of Port Arthur to become a third party administrator for supplemental environmental projects

Tohme gave three options to get the department out of the red.

Option 1 would get out of the red by Sept. 30, 2018 with a residential rate of Tier 1- less than 10,000 gallons. There would be a $15 total minimum usage fee and a 15 percent increase of current rates as of April 1, 2018.

For instance, the current minimum usage fee for water and sewer would rise from $5 to a proposed minimum usage fee of $15. Current water use per 1,000 gallons up to 10,000 gallons would go from $4.40 to a proposed water rate of $5.06. Current sewer rates would go from $4.04 to a proposed sewer rate of $4.65.

A sample bill of a household with 2011 rates based on 6,000 gallons usage would be $71.99. The current household bill based on 6,000 gallons usage would be $55.64. The proposed household bill based on 6,000 gallons usage would be $73.24, $17.60 higher than the current bill and $1.25 higher than 2011.

Apartments will pay the residential rate. The minimum usage fee/unit starts Oct. 1, 2018. Outside city limit rates will receive same percentage increases.

Option 1 residential rate for Tier 2- greater than 10,000 gallons would be $5 for current minimum usage fee for water and sewer and $15 for proposed minimum usage fees for water and sewer. The current water usage rates per 1,000 gallons and up to 10,000 gallons is $4.62, up to a proposed water rate of $5.31. The current sewer rates are $4.04 and a proposed sewer rate of $4.65.

Option 2 would get the department out of the red by Sept. 30, 2019 with increases in two phases over 18 months with a Tier 1 residential rate.

Phase 1 would have a $8.33 minimum usage fee and a five percent increase effective April, 1, 2018.

The current minimum usage fee for water and sewer is $5. Phase 1 minimum usage fee for water and sewer is $8.33. The current water usage per 1,000 gallons up to 10,000 gallons is $4.40. Phase 1 water rates would be $4.62.

Current sewer rates is $4.04 and Phase 1 sewer rates of $4.24.

A sample bill with 2011 rates based on 6,000 gallons of usage of $71.99. The current household bill based on 6,000 gallons usage is $55.64. Under Phase 1, the bill based on 6,0000 gallons usage is $61.51 that would be $5.87 higher than the current bill, but $10.48 less than 2011.

Phase 2 with a $6.67 minimum usage fee and a 10 percent increase effective Oct. 1, 2018.

The current minimum usage fee for water and sewer is $5. Phase 2 minimum usage fee for water and sewer would be $15. The current water usage fee of 1,000 gallons up to 10,000 gallons is $4.40. Phase 2 water usage rates are $5.06.

The current sewer rates are $4.04 and Phase 2 sewer rates are $4.65.

A sample bill with 2011 rates based on 6,000 gallons usage is $71.99. The current household bill based on 6,000 gallons usage is $55.64. Phase 2 of the bill would based on 6,0000 gallons usage is $73.24 that is $17.60 higher than the current bill and $1.25 higher than 2011.

Tier 2 residential rates for Option 2 greater than 10,000 gallons would have an $8.33 minimum usage fee under Phase 1 and a five percent increase effective April 1, 2018.

The current minimum usage fee for water and sewer is $5. Phase 1 minimum usage fee for water and sewer is $8.33. The current water usage rate per 1,000 gallons and more than 10,000 gallons is $4.62. Phase 1 water rates are $4.85.

The current sewer rates are $4.04 and Phase 1 sewer rates are $4.24.

For Phase 2 with a minimum usage fee and a 10 percent increase effective Oct. 1, 2018, the current minimum usage fee for water and sewer is $5. Phase 2 minimum usage fee would be $15. The current water usage rate per 1,000 gallons and more than 10,000 gallons is $4.62 and Phase 2 water rates is $5.31.

The current sewer rates are $4.04 and Phase 2 sewer rates would be $4.65.

Option 3 would get the department out of the red by Sept. 30, 2019 in two phases over 18 months for a Tier 1 residential rate of less than 10,000 gallons.

Phase 1 would have a $10 minimum usage fee and a 7.5 percent increase effective April 1, 2018.

The current minimum usage fee for water and sewer is $5. The Phase 1 minimum usage fee for water and sewer would be $10. The current water usage rate per 1,000 gallons and up to 10,000 gallons is $4.40. Phase 1 water rates would be $4.73.

The current sewer rates are $4.04 and Phase 1 sewer rates would be $4.34.

A sample bill of a household with 2011 rates based on 6,000 gallons usage is $71.99. The current bill based on 6,000 gallons usage is $55.64. Phase 1 of the bill based on 6,000 gallons usage would be $64.44.

The increase from the current bill would be $8.80 and $7.55 less than 2011.

Option 3 Tier 1 rates with Phase 2 with a $15 minimum usage fee and 7.5 percent increase Oct. 1, 2018.

The current usage fee for water and sewer is $5. Phase 2 minimum usage fee for water and sewer will be $15. The current water usage rate per 1,000 gallons up to 10,000 gallons is $4.40. Phase 2 water rates would be $5.06.

The current sewer rates are $4.04 and Phase 2 sewer rates would be $4.65.

A sample bill for a household with 2011 rates based on 6,000 gallons usage was $71.99. The current bill based on 6,000 gallons usage is $55.64. Phase 2 for the bill based on 6,000 gallons usage would be $73.24.

The increase from the current bill would be $17.60, $1.25 higher than 2011.

Tier 2 residential rates, greater than 10,000 gallons for Phase 1 would be a $10 minimum usage fee and a 7.5 percent increase effective April 1, 2018.

The current minimum usage fee for water and sewer is $5. Phase 1 minimum usage fee for water and sewer will be $10. The current water usage rate per 1,000 gallons but not more than 10,000 gallons is $4.62. Phase 1 water rates will be $4.97.

The current sewer rates are $4.04 and Phase 1 sewer rates would be $4.34.

Phase 2 would have a $15 minimum usage fee and a 7.5 percent increase effective Oct. 1, 2018.

The current minimum usage fee for water and sewer is $5. Phase 2 minimum usage fee for water and sewer would be $15. The current water usage rate per 1,000 gallons but not more than 10,000 gallons is $4.62. Phase 2 water rates would be $5.31.

The current sewer rates are $4.04 and Phase 2 sewer rates would be $4.65.

Tohme said there’s much work to do for the water utilities department in-house and outside contractor work, but it can’t be done without funding.