City of McKinney proposes water and wastewater rate increases for fiscal year 2026

During the recent McKinney City Council Work Session held on August 8, 2025, city officials discussed critical financial strategies concerning the city's general obligation debt service plan and water and wastewater rate adjustments. These discussions are pivotal as they outline the city's fiscal health and its ability to manage growth and infrastructure needs.

The meeting began with an overview of the general obligation debt service plan, which is essential for determining the city's total debt capacity and maintaining its interest and sinking (I&S) rate. This plan is closely tied to the city's capital improvement projects (CIP), which include significant infrastructure developments such as the rebuilding of Fire Station 8. The council emphasized the importance of aligning the general fund plan with the debt service plan to ensure that new projects can be funded sustainably.

A significant portion of the session was dedicated to the review of water and wastewater rates, presented by Dan Jackson from Willdan Financial Services. Jackson highlighted that McKinney's rapid growth necessitates annual reviews of its rate structure, unlike many other cities that typically conduct these reviews every few years. The city's unique situation, driven by its growth and fluctuating rates from the North Texas Municipal Water District, requires careful management to ensure that rate adjustments reflect both operational costs and the need for infrastructure investment.

Jackson reported that the average residential customer in McKinney currently pays approximately $136.30 per month for water and wastewater services. Under the proposed plan, this amount would increase by about 4% in the coming fiscal year, translating to an additional $4 to $6 per month for most residents. This increase is deemed necessary to cover rising costs associated with water procurement and infrastructure improvements, including an anticipated $253 million in long-term debt for system enhancements over the next several years.

The council also addressed the issue of outside city rates, confirming that it is fair and reasonable to charge a premium for services provided to customers outside McKinney. This policy has been a standard practice for decades and is based on the higher costs associated with serving these customers.

In conclusion, the discussions during the work session underscored the city's commitment to maintaining financial sustainability while addressing the needs of a growing population. The council is expected to review and adopt the proposed rate adjustments in the coming weeks, ensuring that McKinney can continue to provide essential services without compromising its fiscal integrity. As the city prepares for future growth, these financial strategies will play a crucial role in shaping its infrastructure and service delivery.