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NEW STUDY MAY PROMPT RATE INCREASE
The Capex consulting firm has been contracted by the city of Cotulla to examine the rates charged for municipal utilities, a move that many at City Hall believe will result in an increase in fees.
“There is no easy way to say it,” City Administrator David Wright told councilors at their meeting Tuesday, September 19. “A lot of our projects are being funded by hotel occupancy tax revenues and state grants. Our utility services are being subsidized by sales tax revenues.”
Wright said he believes the city has been helping foot the bill for its various departments to the tune of two million dollars a year, a figure that he said is unsustainable if the city hopes to meet its pledge of upgrading infrastructure, modernizing facilities, providing new services and enhancing the quality of life for its residents.
“No department is operating independently,” the city administrator said. “Prices have increased. The solid waste department by itself lost two million dollars last year, and it’s been doing that year after year.”
Sales tax revenues to the city have increased in the past year. The collection for September, reported last week by finance officer Ernesto Garcia III, was $167,000. Collections for the fiscal year have exceeded $2.4 million, which represents a 36-percent increase over 2022.
Hotel occupancy tax revenues have also increased this year, although the funds cannot be used for city operations or service improvements. Collections so far this year have topped $1.1 million, with $260,000 in the fourth quarter alone. The revenues are used by the city to pay for beautification, historic preservation, and special projects that enhance tourism. Regulations on the expenditures are set by the state of Texas. Projects paid for with hotel tax revenues have included the new City Hall in a onetime garage and service station on Main and Carrizo streets, the ongoing refurbishment of Plaza Florita, and support for popular visitor events such as the annual Wild Hog Cook-Off and the Independence Day celebration.
“The council and the public have asked for improvements, such as roads and trees,” Wright said, “but with a tax rate at 70 cents, and with our sales tax revenues, it’s not possible.
“We need to get a rate study to adjust and at least break even,” the city administrator said last week. “If we can break even, then we can do things. Some roads are still dirt. We have talked about bulky trash pick-up, but how do we do this if we are two million dollars in debt?
“If I do nothing now, then we are going to continue to decline in our finances,” Wright said. “It needs to be addressed.”
Councilors learned that a utility rate increase that had been scheduled to take effect in 2018 was never enacted, and that residents have been paying the same rates for their city services for at least five years.
Wright said many of the city’s expenses in infrastructure repairs have doubled, due in large part to supply shortages and rising construction costs.
Cotulla ranks among the South Texas cities with the lowest utility service rates and second only to George West in its commercial rates.
“We are looking for something reasonable,” Mayor Javier Garcia said of utility rates pending the outcome of the study. “We aren’t going to go up thirty bucks. This will be a start. We are asking to look at the rates, get the study underway.
“Every city goes up in its rates every other year,” the mayor said. “We haven’t gone up for five years.”
The move to contract Capex for the study was made on a motion by Councilor Manuel Rodriguez, seconded by Councilor Gilbert Ayala and supported by Councilors Tanis Lopez and Alejandro Garcia Jr. Councilor Eloy Zertuche was absent from the Sept. 19 meeting.