Kyle City Manager Lanny Lambert told Monarch Utilities that customers are unhappy and feel unsafe. “First of all, (Monarch Utilities) have painted all their fire hydrants black, which indicates inadequate fire protection, and they’re scared to death that their houses are going to burn down.” (Photo by Andy Sevilla)

by ANDY SEVILLA

Kyle is making headway in its attempt to regulate Monarch Utilities, Inc. who has been the center of many complaints ranging from poor customer service, subpar fire protection, and less than desirable water quality.

After years of residents’ complaints, Kyle is now offering Monarch an ultimatum – agree to our rules or get ready for battle.

About 900 residents in the Amberwood and Indian Paintbrush neighborhoods receive water services from Monarch; and after lodging complaint after complaint, for at least the past five years, residents now are lobbying council to kick Monarch out of town.

But, expelling Monarch, a subsidiary of the California-based SouthWest Water Co., is not easy, as their right to service certain area residents is bestowed by the state.

Amberwood and Paintbrush are under Monarch’s Certificate of Convenience and Necessity (CCN), which ultimately guarantees a water monopoly for this region, said Kyle City Manager Lanny Lambert.

“A CCN is assigned by the State of Texas and it identifies who has the authority to sell water within that region,” Lambert said. “The State of Texas, years ago, decided that they would guarantee monopolies to water companies, both private and public, if they would provide water for everyone within that region.”

Therefore, Kyle cannot service Amberwood or Paintbrush.

Lambert said that since the state guarantees water companies a monopoly, through CCNs, the state could then regulate the company’s water quality, water services, and prices.

But Kyle has listened to its residents in the northeast and is putting all options on the table, including stricter regulation, dual certification, buying Monarch, or potential condemnation.

Lambert said an agreement has recently been sent to Monarch demanding fixes to residents’ complaints and improvement to its overall service, but the water company has not yet agreed nor counter offered.

The agreement calls for a customer service telephone line, resolution to customer service issues, compliance with TCEQ standards for public water systems, adequate fire flow service, resolution for quality of service issues, resolution to taste and odor of water, annual reviews and limited water rate hikes.

The agreement states that Monarch cannot increase its water service rates until 2018, and thereafter cannot increase their rates by more than five percent. Monarch can only increase rates once every five years.

Lambert said that years ago, before he came on with the city, Monarch was willing to sell to Kyle for $15 million; but that amount, for only 900 customers was not a viable option at the time.

At council’s Aug. 21 meeting, council members approved the hiring of Jim Boyle; the attorney who settled water rate hikes for Monarch customers earlier this year for Kyle and other cities, to lobby the state legislature for more control over private utilities that serve some residents, and for CCN dual certification.

Council members also directed staff to seek permission from TCEQ for CCN dual certification. If approved, Kyle would lay water lines next to Monarch water lines, and provide residents with an option for providers.

Boyle’s spring settlement, which included Kyle and other cities, with Monarch called for an increase in water rates by 14 percent, much lower than the company’s original request of 62 percent last year.

Under the settlement, Monarch customers’ water bill will be about $74.40 in January. Monarch customers’ average bill increased in June to $71.47 from $65.29.

The average Kyle water bill is about $39 per month, though that will increase after the 20 percent rate increase the city imposed goes into effect Oct. 1. Another 20 percent water rate hike is proposed for next fiscal year.

Related stories:

• Kyle offers water option for Monarch customers  08/1/2012
• Fishy water bill  09/22/2010
• Monarch settles for smaller rate hike in Buda, Kyle  05/21/2012