Pretty… but pricey


 By LPR Staff



In connection with the upcoming expansion project on Highway 183, the Lockhart City Council has a big decision to make about what will be done with utilities on the central thoroughfare in town.

While some are in support of burying all utilities to enhance the aesthetics of the project, others su

ggest the price tag attached to underground utilities – estimated up to $12 million by City Manager Vance Rogers – is too steep a price to pay on a project that, while desirable, is not necessary.

“I heard someone ask the question, ‘is this a need, or a want,’” Lockhart Mayor Lew White said on Monday while discussing the project. “And we’ve been told that people want to do this because it will boost economic development and it will make Lockhart more visually attractive.”

There is no evidence though, White said, to back up the notion that underground utilities are a draw when it comes to economic development.

“I think that when it comes to businesses relocating to town, I don’t know if they look at whether or not a city has underground utilities to make that decision,” he said.

The Texas Department of Transportation (TxDOT) has asked for a commitment from the City of Lockhart, describing what the city means to do with the utilities – electric lines, water and wastewater lines, telephone lines and cable – that need to be relocated to accommodate the expansion project; TxDOT expects that commitment by the end of April, before they schedule the project.

Though the utility relocation has been on the front burner of council talks for weeks, the final vote is scheduled on April 3, after which the City will be able to notify TxDOT they are ready to move forward with the $13.4 million project, which will expand Highway 183 from Pecan Street to MLK Industrial Blvd., adding sidewalks, curbing and a turn lane.

Lockhart won a grant in October that will fund the roadway project, with the understanding that the City would accept responsibility for relocating the utilities.

“The expansion is a public safety project,” White said. “And it’s something that needs to be done. How many times has someone been not paying attention, or distracted by something else, and rear-ended someone waiting to turn into a business on 183? How long do we spend caught in traffic waiting for someone to be able to turn left across traffic?”

Since the grant project was approved, Rodgers has worked with AT&T, Time Warner Cable, and the city council in an effort to determine the best course of action for utility relocation, which could be so simple as moving lines, pipes and poles, and could be so complex as burying all the utilities underground.

The key factor, moving forward, will be the cost of the relocation.

Both Time Warner and AT&T have quoted figures in the millions to fund their portions of the relocation; most of those costs, according to Rodgers, will be passed along to customers through increased service rates.

The City of Lockhart is in a similar position – facing a multi-million dollar project, the costs of which will be passed through to utility customers.

The bear minimum project, simply moving the utilities in accordance with TxDOT stipulations, is expected to cost around $3 million. Though the City will issue a certificate of obligation to pay for the project, they expect to repay that debt through increased rates to utility customers.

The average homeowner, who uses 2,000 kilowatt hours per month, can expect to see a $10.76 increase on their monthly utility bill to fund the project.

The lowest-consumption users, who use 1,000 kWh or less, will see a $4.72 increase. White said those customers include mostly senior citizens, the disabled, and Lockhart’s lowest-income users.

Small businesses, who use 5,000 kWh or less per month, will see a monthly increase of $13.92, while the largest consumers, which include the Lockhart Independent School District, Serta and the local grocery and department stores, will see monthly increases around $282.32.

In the alternative, if the City moves forward to bury all utilities, those monthly increases become exponentially higher.

Small residential users can expect a $10.22 per month increase to fund the $12 million project, while the average user will see an increase of $21.76. Small businesses may have bills that increase $41.42 per month, and the highest-end users will see utility bills that skyrocket $832.28 per month.

“Most of the people that we’re hearing from are the mid-range, middle income users who are saying, ‘well, I can afford that increase,’” White said. “What they aren’t thinking about is the fact that there are many people in our community who, any increase in their monthly bills is going to create a hardship. And this increase, this only [emphasis added] affects their service charge; this doesn’t take into account any increases we might see in generation costs, fuel costs or the other costs that we have to pass through from LCRA.”

The price increases attached to the utility relocation project will go on for 20 years, while the debt is being repaid.

White said one of his biggest concerns about relocating the utilities underground centers around “handcuffing ourselves with $12 million in debt.” According to the city’s financial officers and advisors, he said, the $12 million debt will cause the city to near its borrowing limit, which could impact the council’s ability to borrow more money in the case of a future emergency.

The Lockhart City Council is expected to vote on the utility relocation project during their next regular meeting, scheduled at 7:30 p.m. on Tuesday, April 3. The meetings are held in the Glosserman Room of Lockhart City Hall and are open to the public, and televised on Time Warner Digital Cable Channel 10.




1 comment

  1. Donna Voetee 2 April, 2012 at 22:09 Reply

    Lockhart ‘won’ a grant to fund the 183 expansion and it’s only going to cost (minimum) $12 million? Reminds me of the phone call I got from the promotion company telling me I had won the trip to Las Vegas, but there were, um, just a few ‘handling charges’ to take care of. My ‘free trip’ was going to cost over $200, when all was done. I did not go to Las Vegas, and I think our City Council should re-think this ‘gift.’

    If the “free” money comes with such a high price, then is it truly a good deal? When we homeschooled, we read Richard Maybury’s book, “Whatever Happened to Penny Candy?” in which he teaches an important principle that I think our civic leaders have forgotten: TANSTAAFL. THERE AIN’T NO SUCH THING AS A FREE LUNCH.

    Where does TxDOT get their money to award it out to the worthy? Doesn’t all government money ultimately come from “We the People”?
    Lockhart homeowners, businesses, and renters will be funding this project at both ends: 1. As the source of the “free” money from TxDOT and 2. As the obligatee of the loan that will be contracted to move the utilities.

    Another thought: The City of Lockhart purchases power and re-sells it to us at a profit. Is there not overhead and upkeep included in that final cost? Why would a loan be needed if the lines were merely upgraded as part of normal maintenance? Unless, of course, those funds have been hornswaggled to other accounts…

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