Cibolo staff propose water acquisition set‑aside, 2% wastewater pass‑through for FY26; council hears debt impact estimates for South Plant expansion

City staff presented the draft FY26 utility fund budget at the July 15 Cibolo budget workshop, recommending a $1,000,000 set‑aside for future water acquisition, $100,000 for a water‑specialty consultant, and a recommended 2% wastewater rate increase that would be a pass‑through of a 2% increase from the Cibolo Creek Municipal Authority (CCMA).

Staff said the city is waiting for results from a contracted utility rate study (Willdan Financial Services) before proposing broader water rate changes, but recommended the wastewater pass‑through now because CCMA is increasing its rates. The presentation noted reduced FY25 revenue expectations in the utility fund due in part to rainfall‑driven lower consumption and to a new commercial solid‑waste franchise arrangement that moves commercial dumpster/compactor billing to Waste Connections; the city will instead record a franchise fee from that contractor.

Staff outlined a set of upcoming external cost pressures from the Canyon Regional Water Authority (CRWA) budget: a proposed 5% raw water cost increase set by the Guadalupe‑Blanco River Authority, 3% merit and COLA for CRWA staff, and large planned increases in repair and replacement funding passed through to members. The presentation said CRWA plans major capital items in FY26 (for example, a Lake Dunlap strainer project and an emergency generator) that will be allocated to member cities.

On the proposed CCMA South Plant expansion, staff presented a worst‑case estimate under CCMA's larger debt option: if the debt were spread only across the city's existing customers (11,556 customers at present), the added cost could equal roughly $18.49 per month per customer in a high‑year scenario; allocating the debt by consumption would equate to about $2.74 per 1,000 gallons, or about $16.47 monthly for a customer with a 6,000‑gallon monthly usage. Staff noted CCMA may use impact fees to offset some costs and that these are worst‑case estimates that assume no growth.

Council members asked staff about cutting expenses and funding sources; staff reiterated that some reductions are one‑time (equipment purchases and set‑asides) and that rate study results will inform final recommendations. Council voiced concern about future bond/debt needs tied to South Plant construction and asked staff to continue analyzing billing and allocation alternatives so that only impacted customers might bear appropriate shares of debt service. No formal rate change ordinance was adopted at the workshop; council discussion focused on analysis and next steps.