Angleton council approves utility rate increases; NewGen outlines plan to fund $8 million wastewater project

The Angleton City Council voted Feb. 26 to implement utility rate changes recommended in a NewGen Strategies and Solutions study intended to help finance a proposed $8 million wastewater treatment plant design‑build contract.

Matthew Garrett of NewGen told the council the study focused on a near‑term rate plan to fund the Schneider Electric design‑build wastewater project and to respond to rising operating costs. "We are proposing a wastewater minimum rate increase of 25% effective March 2025," Garrett said, and he recommended an additional 25% minimum increase in October; Garrett also recommended a 10% increase to the water minimum in October. Garrett said the study assumes the city will need roughly $600,000 per year in additional debt-service funding to support the capital project.

NewGen briefed the council on assumptions: municipal cost index (2.92%), construction cost indexing, conservative salary and benefits projections, and wholesale water‑purchase increases provided by Brazosport Water Authority. Garrett said the study maintains an outside‑city differential (1.25x) for outside customers but warned council that outside customers can appeal rates to the Public Utility Commission.

Garrett said the proposed rate changes focus on minimum charges (fixed portion) rather than volumetric charges so the revenue stream better matches fixed debt-service obligations. He showed residential minimums at $33.61 per month under current rates and projected a 10% October increase raising the minimum to $36.97, and he described the combined steps as producing modest per‑bill dollar increases ("less than $4" on the first adjustment for many residential customers).

Council discussion covered timing, assumptions about future subdivisions and customer growth (NewGen used conservative development forecasts), and the risk tradeoffs of maintaining an outside‑city rate differential. Garrett said payments from non‑rate revenues and expected new customers will help, but that without rate changes the city's days‑cash reserve could fall to single digits; NewGen showed a target debt‑service coverage ratio of 1.25 and said the recommended rates aim to reestablish financial stability.

Councilman Sarton moved to approve the study's recommended rate changes and Councilman Booth seconded. The motion carried on a voice vote. Council asked staff to return with more detailed financial comparisons and to continue evaluating options such as resale of treated water or other offsets that could reduce long‑term rate needs.

Next steps: staff will implement the March adjustment and return to council with a refined plan for the October adjustment and for bonding documentation tied to any debt issuance.