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City leaders learned of line breaks, costly repairs and the need for more repairs as well as a rehash of the financial dire straits of the city’s water and sewer funds

Calvin Matthews, director of water utilities, said that during the recent snow event, there were a number of broken lines and issues that resulted in the city issuing a boil water notice. The problems were repaired and the order was lifted with the exception of Sabine Pass where a bigger problem lay requiring the surveying of land to find valves.

Dr. Hani Tohme, consultant to the city manager, brought back information on the city’s need for funding for the water and sewer funds.

Tohme previously proposed a 7% rate increase in order to generate the needed monies.

He said that last year when the city was preparing for the 2025 budget there was a proposal for capital improvements. The 7% raise would have helped fund the projects.

Some of the $8 million budgeted for the water and sewer fund was used to install leak detection equipment and other necessities.

But there were more needs.

“Unfortunately that budget was not approved by council because in order to get the funding to complete these projects we required a rate increase,” Tohme said.

Instead, the city approved a capital improvement budget for this year at just over $1 million and it is listed as “non-designated.” That funding has been kept for emergencies that will occur because of the age and deterioration of the water and wastewater infrastructure.

“Based on the current revenue and current expenditures for October, November and December we’re looking at a projected deficit in the utilities fund of $3 million,” he said.

Lynda Boswell, finance director, explained the water and sewer funds are supposed to be “enterprise funds” meaning they fund themselves.

But the funds are literally being driven into the ground financially.

“In other words, functionally bankrupt,” Boswell said. “I do not foresee any recovery in this without a rate increase. This is a business and your costs are going up and there’s no planned investments to make this any better.”

Each delay, she said, raises the cost of repair by at least 25% for the next year.

“The legacy for any future residents is to burden that generation because small incremental increases today are not being done,” she added. “The budget was adopted and it was already not sustainable and it seemed no one wanted to hear from me. Please hear me. This is not about how you feel or how this makes you look, it’s about sound financial decisions based on facts and accepted practices.”

No decision was made on the water and sewer rates during the recent meeting.