El Paso

Rate increase likely for El Paso Water customers

EL PASO, Texas - The city of El Paso has given the green light to proceed with up to $152 million in bonds for El Paso Water  projects.

El Paso Water officials said the money is going to be used for maintenance, the rehab of existing facilities and building of new facilities to keep up with the city's growth. The plan is to also refund old bonds in order to get a better interest rate to save the city money.

Mayor Dee Margo spoke about the process after Tuesday's City Council meeting.

"In this case, in addition to paying off the construction costs of the replacement lines and the things that were done, they are going to save some money by repurchasing bonds, so we can save money on the interest rate," Margo said.

John Balliew is the president of El Paso Water Utiliites.

"The principle idea that we are shooting for is that we don't want to issue the debt before we actually need the money No.1, so that we are not paying interest for nothing. But once we realize the money we want to pay as little interest rate as possible. So we try and time the market like that," Balliew said.

Balliew predicts there will be an impact on rates.

"In the last fiscal year when that financial plan was updated, there are a water and waste water increase and a storm water increase that was forecast in the plan," Balliew said. "But of course, that is up for the Public Service Board to adopt as part of their budget. And so we will be going through the budget process in November and December. And those meetings are open to the public. Probably in January, the actual budget will be adopted and that is when the rates will be set. So I can't say concretely what the impact will be at this point and time."

Balliew said the next step will be a consultation with the financial underwriters.

"Projects include basic water and waste water infrastructure. Reservoirs, pipelines, replacement of pipelines. We are emphasizing more of that to make sure we keep up with our aging infrastructure. And then some additional storm water projects. I think one of the projects, for example, is in the Thomas Manor area next to Thomas Manor Elementary School where we are rebuilding one of our storm water structures into a park pond," Balliew said.

Balliew said there will likely be an increase in water rates.

"We are very cognizant of all these things going on in terms of the pressure on the public and those sorts of things. But I would just like to point out that since you brought up the electric company we are the largest if not the second largest consumer of electricity in El Paso. So when the electric company does anything with their budget it affects our budget as well," Balliew said.

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