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Residents and commercial/industrial water customers in Port Arthur will see an increase in their bills in order to minimize a major deficit. 

The rate increase was approved unanimously Tuesday and comes after multiple warnings from the city’s water department on infrastructure needs and the fact the funds are in a deficit.

The increase for residential customers will be  5.6 percent and 11.5 percent for commercial/industrial accounts.

Dr. Hani Tohme, engineering consultant for the water department, said they are trying to generate revenue for the next six months of at least $1.5 million. 

Different percentages were discussed with some council members trying to place the bulk of the increase on commercial/industrial accounts to alleviate the sting to residents. 

“The rate increases we are proposing here are purely to try to balance this budget or to bring the negative, or the red, to the lowest possible amount,” Tohme said. 

The rate increases at this time — 6 months after the budget started — will not provide funding for capital or a second pipe bursting crew.

The deficit in the water department isn’t new and won’t go away quickly.

“We’ve already taken $3.2 million dollars from the general fund to proceed with the project the TCEQ (Texas Commissions on Environmental Quality) was requiring us to do, that y’all approved at the last meeting plus some emergency work,” Tohme said. “Right now we have over $400,000 of emergency work taking place that’s also going to have to come out of the general fund.”

Finding a rate that generated the necessary funds led to much discussion. Each 1.5 percent of an increase would generate an extra $177,000 roughly. 

The projected deficit is $2.4 million and the increase would drop that figure down to about half. 

But, Tohme said, these figures are current to Feb. 10.

“There could be four more emergencies from now to the end of the year. That’s going to be an additional deficit that will be added to the numbers,” he said, adding the projections are based on revenue and expenditure up to Feb. 10.

Councilman Donald Frank reminded fellow council members of recent problems such as during the recent freeze/snow event where Sabine Pass residents had no water service due to infrastructure issues. 

 

Background

In 2023, Tohme spoke of the city’s need for a rate increase to fund infrastructure rehabilitation and repair.

That August he proposed a 7 percent increase in water and sewer rates to generate the money needed to get back on track, saying the infrastructure needs had been neglected for 20 or so years. The option was not adopted.

In June 2024 Tohme along with the city’s water utilities director Calvin Matthews brought detailed information on needs that have been neglected for decades.  The proposal was broken down by priorities, with one being the highest priority and two not as urgent but still necessary. There are issues with sanitary lift stations, sewer pipe replacement, the water purification plan for the Gulf Pump Station project, wastewater treatment plant projects; and more.