By CASSIE MCKEE, Four Points News
More than 1,000 water utility customers in River Place will soon be getting a check in the mail.
The money comes from a 2015 legal settlement the River Place HOA reached with Austin Water Utility over a spike in water and wastewater rates that occurred in 2014.
At their Mar. 8 meeting, the River Place Residential Community Association board voted to disburse the remaining $733,000 it received from the settlement.
“The checks will be issued in the second quarter of 2016 based on their pro rata share of MUD property taxes for the benefit of the residents of the River Place MUD,” said River Place HOA chairman Scott Crosby.
“A committee of the board is working through the details, which include obtaining and verifying the MUD tax listings, notifying the City of Austin of its planned disbursement as required by the settlement agreement, calculating the check amounts, the homeowner communication and issuing the checks,” Crosby said.
While the board had initially planned to use the money to repay a portion of outstanding MUD bond debt, Crosby said the MUD had recently made a bond payment and so the $733,000 was more than the remaining amount owed.
The refund is in addition to a one-time credit to the former MUD customers of the difference between the former MUD rates and the COA rates applied to the water usage in Oct. 2014. Customers should have already received that credit.
“We do not know the total amount of the credit as it was calculated by the COA and awarded via a credit to the monthly bill,” Crosby said. “Based on historical usage, we made an estimate that the total was about $125,000.”
In Dec. 2014, the HOA filed a Water Rate Protest with the Public Utility Commission against AWU, after the city imposed a dramatic increase in water and wastewater rates upon the ratepayers of the River Place Water and Wastewater Systems. Residents saw the first increase in Oct. 2014 and then another increase in Nov. 2014.
“The increased rates adopted by the City of Austin are unjust and unreasonable, and they unfairly burden existing customers with the costs to serve new development and to pay for City of Austin charges unrelated to the cost of service for the River Place Water and Wastewater System,” according to the petition filed by the HOA.
As a result of the rate increases, customers’ average monthly water bills increased from $73.50 to $131.34 on Oct. 1, and then to $149.93 on Nov. 1, 2014. The average monthly wastewater bills increased from $15.70 to $45.46 on Oct. 1, and then to $46.71 on Nov. 1, 2014.
The rate increases affected 1,047 water utility customers and 1,035 sewer utility customers. The petition included the signatures of 359 customers, more than 34 percent of the affected ratepayers. State law only required signatures of 10 percent of affected ratepayers.
The petition filed by the HOA said the city failed to send written notice of the increase to customers and also did not provide individual, written notice to each petitioner within 60 days after the date of a final decision on a rate change as required by state law.
After a number of unsuccessful motions to dismiss the case, AWU agreed to an initial settlement conference in May 2015 and on Jul. 22, 2015, the HOA board agreed to a final settlement.
“The board is satisfied that this settlement is an appropriate conclusion to this case given the cost, time and risk of continuing,” Crosby said.
Under the terms of the settlement, the HOA agrees to an abatement of further legal proceedings. The settlement also contains an agreement that AWU will not attempt to recover expenses from the case from the former MUD customers. The final provision is that River Place customers will continue to pay COA residential retail water and wastewater rates until annexation, which is scheduled for Dec. 31, 2017.
River Place is in the process of being annexed by the city of Austin. River Place homes north of Merrywing Circle and Merrywing Cove have already been annexed, according to Crosby. The remainder of River Place will be fully annexed on Dec. 31, 2017.
Crosby said the HOA board agreed to the settlement because legal cases are subject to risk with no guarantee of winning, as well as expensive and can often take years to conclude.