Three Texas churches that believe a local ordinance unjustly charges them excessive water fees have taken their case before a state appeals court.
Magnolia Bible Church, Magnolia’s First Baptist Church and Believers Fellowship had their complaint against the city of Magnolia heard before the Texas Third Court of Appeals in Austin on Wednesday.
First Liberty Institute, along with attorneys with the Baker Botts law firm, argued the case on behalf of the churches, stating that the city’s recent fee increase violated the “due process” rights of the congregations.
“Cities in Texas at least have to give due process to churches before imposing their water fee scheme,” said Aaron Streett, First Liberty network attorney with Baker Botts, in a statement released Wednesday.
“Due process, and basic fairness, prevent cities like Magnolia from excluding churches they know object to their water fee scheme from participating in legal proceedings attempting to validate that scheme.”
Last May, the three churches filed suit against Magnolia, accusing the city of taking “unprecedented action to recoup property tax revenue from churches.”
At issue was a local ordinance for tax-exempt entities adopted in March 2018 that increased the fees for water use by changing their status from “commercial” to “institutional.”
The city’s decision reportedly came as a way to help close a financial gap between the growing cost of providing water with revenues not increasing fast enough.
“This new ‘Institutional Water Rate’ marked a dramatic shift in the status quo. Under the city’s old water rate, ‘institutional’ users such as churches paid the same rate as commercial users. But under the new rate, the city now forces them to pay a significantly higher rate than that of their commercial counterparts,” stated the lawsuit.
“To be more specific, the ‘institutional’ users bear water rates up to nearly 75% greater than commercial users. For instance, a church that uses 5,000 gallons of water bears a water rate of $52.50, whereas a similarly situated commercial user would pay only $30 for that same amount of water — less than two-thirds of the cost borne by the church.”
Magnolia City Administrator Paul Mendes said in comments to the Community Impact Newspaper last year that raising the water fees is a rare occurrence, the last one being in 2005.
“The cost of providing water and wastewater has gotten more expensive [since 2005], but council members were reluctant to raise rates because, quite frankly, it’s an unpopular decision,” explained Mendes. “We did not come to this conclusion lightly or with any malicious intent.”