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Consultants present wastewater rate plan tied to growth, bonds and impact fees
Summary
Consultants told the Liberty Hill council workshop that wastewater capital needs — including expansions at the South Fork plant and a planned Advanced Water Purification Facility — will require bond financing and draft rate increases (about 6.5% annually in the first years) that depend heavily on growth and impact-fee revenue.
At a City Council workshop, consultants from CDM Smith and NewGen Strategies and Solutions presented a draft wastewater rate plan and the wastewater master plan recommendations, saying the city will likely use bond financing and impact fees to fund major capital projects over the next five to 20 years.
The presentation by Alex Doody, engineer with CDM Smith Engineering, summarized recommendations from the wastewater master plan, including expansion of the South Fork Treatment Plant and later additions of a North and West plant. Doody also identified the Advanced Water Purification Facility as “one of the major projects in the wastewater portfolio.” He said the master plan will be presented for final adoption at a later council meeting.
Matthew Garrett, a consultant with NewGen Strategies and Solutions, presented draft rate assumptions and said the wastewater enterprise must “pay the bills.” Garrett told the council the city’s sewer and wastewater funds are expected to face a substantial increase in capital-related expenses and that his draft plan assumes bond financing with roughly 5% interest and 20-year terms. He said projected aggregate debt service could rise from about $30.3 million to about $75.4 million depending on issuance timing and structure, and that the first principal-and-interest payment would typically begin the year after a bond sale.
Garrett and Doody emphasized that growth assumptions heavily affect rates. The consultants used living-unit-equivalent (LUE) projections supplied by staff and assumed buildout of vacant lots and known committed projects. Georgetown’s wholesale service area was modeled at about 11,000 LUEs with roughly 1,500 LUEs per year added; Leander wholesale growth was excluded from the current analysis because the data were not available. For Liberty Hill, Garrett said the conservative projection used in the draft shows about 44 and then 100 additional connections, rising to roughly 160 by year five as presented to the council.
The draft financial plan assumes a 6.5% annual rate increase for both in-city customers and outside contractual customers (Georgetown and Leander) in early years, combined use of available fund balances and incoming impact fees, and conservative inflation assumptions for operations and maintenance. Garrett said those assumptions produced a comparatively modest near-term rate increase given the scale of planned capital work, but cautioned the council that a slowdown in growth would increase rate pressure and that the plan should not be treated as fixed.
Council members asked about commercial and off‑limits growth assumptions and how prepaid development agreements and impact-fee timing affect revenue. McKenzie (city staff) told the council that “impact fees, they’re assessed at the time of final plat,” and that fee payments typically occur at building permit issuance, so increases to a maximum assessable fee would take time to reach the city coffers. Garrett and staff noted some developments may have prepaid LUEs or development agreements that lock in earlier fees and delay receipt of higher, newly adopted impact‑fee revenue.
No formal votes or motions were recorded during the workshop. Consultants and staff closed by saying the draft rate model remains subject to revision — including bond structure, market interest rates, actual growth, and any council decision on impact fees — and that the council and finance staff should monitor permit and growth trends and update assumptions as needed.
The wastewater master plan and associated rate study were identified as items for future council action; the presentation materials and a final adoption item were to be scheduled for a subsequent council meeting.
