City Manager Jason Weeks told the Mineral Wells City Council during an August budget workshop that the proposed fiscal 2026 budget depends on a significant utility rate increase and new borrowing to cover water system capital needs and debt service. The administration’s “worst-case scenario” draft would push a typical in‑city household bill for 5,000 gallons of water and 4,800 gallons of wastewater from $189.78 a month to $246.34, an increase of $56.56, or about 29.8%.

Why it matters: The Water and Sewer Fund closes the current year below the city’s fund‑balance policy and needs both revenue increases and new debt to pay for planned capital projects, including work tied to the Hilltop and Turkey Peak water projects. Absent higher rates and outside financing, the city’s long‑term plan projects negative cash in some out years.

At the workshop, Weeks said the proposed rates were shaped using a draft from NewGen Strategies, the city’s outside utility consultant. “Last week, we received what we call a draft format of a proposal,” Weeks said, adding that the NewGen study’s presentation and a more complete set of options will be before the council at its regular meeting on Sept. 2. Weeks told council members the version presented to them in the budget packet represents the “worst‑case scenario product” and that alternate, lower options may be available at the Sept. 2 review.

What the budget shows: Water and sewer revenues in the FY2026 proposal rise sharply — Weeks characterized part of the jump as a 44.8% increase (about $7.8 million) driven primarily by the proposed rate changes and by planned borrowing for capital projects. The city’s payment to the water district — listed as about $14 million — represents roughly half the water and sewer budget. The City Manager also described planned loan issuances, including an expected Texas Water Development Board (TWDB) low‑interest loan of about $49 million and roughly $13 million in open‑market borrowings to finance treatment‑plant and related capital work.

Fund balance and near‑term risk: Weeks said the Water Fund’s current ending fund balance is about 17.8% (about 53 days of operating cash), under the city’s 25% / 90‑day policy. The proposed budget would leave the water fund with a negative excess of roughly 37 operating days relative to the 90‑day target. Weeks warned that even with next year’s increases the fund may need additional adjustments across multiple years rather than a single immediate, full correction: “There are going to have to be additional — there’s no way you can come next year and do it all that one year,” he said.

Staffing and capital tied to rates: The FY2026 draft includes new water‑system positions and capital expenditures that drive part of the rate need. Weeks described adding an assistant public works director and a new water crew. The presentation later clarifies the crew addition as three full‑time equivalents (a senior equipment operator and two water operators) to expand distribution and collection staffing; other supplemental requests listed replacement vehicles, equipment and line repairs, and a multi‑year capital improvement plan (CIP) detailed in the budget book (pages cited by staff).

Debt flow and documentation: Weeks walked council members to budget pages that itemize CIP projects and debt service, saying the TWDB loan and open‑market borrowing are incorporated into the five‑year water plan and the rate model. He directed council to pages in the budget book that list project-by‑year CIP and funding sources and said the city’s in‑house figures closely tracked NewGen’s analysis.

Next steps and council review: NewGen Strategies will present the formal rate study at the Sept. 2 regular meeting, Weeks said; the council will then discuss the tax rate and the full budget in advance of public hearings scheduled for Sept. 16. Weeks advised council members that, per the city charter, changes after the public hearing would require an additional hearing and urged members to identify changes before Sept. 16.

What the presentation did not decide: The workshop presented a budget draft and a proposed rate scenario but no final council action on rates or borrowings. Weeks repeatedly framed the rate proposal as a draft and advised that the consultant presentation might offer lower alternatives. There were no motions or votes on water‑rate changes during the workshop.

Concise context: The proposed rate rise follows an earlier large adjustment the council implemented in 2023 and a subsequent year when the council declined a consultant‑recommended increase; Weeks said that history and timing of new subdivisions (homes coming on tax rolls) shape revenue timing and the five‑year outlook.

For readers: The city manager pointed the public and council to the budget packet’s CIP listings (budget book pages referenced during the presentation) for line‑by‑line details and said NewGen’s Sept. 2 presentation will explain how rates were computed and what alternate scenarios council might consider.