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Pflugerville staff outline FY2026 utility rate assumptions, rising debt service and master-fee schedule changes
Summary
Finance and utility staff told council on July 8 that water/wastewater debt service will rise sharply in coming years, that staff plans for base- and volumetric-rate updates, and that proposed changes to the master fee schedule would raise some building, permitting and park rental fees while adding or clarifying several charge categories.
Pflugerville finance and utility staff presented the city's FY2026 utility fund assumptions, proposed rate updates and recommended changes to the master fee schedule at the July 8 work session and regular meeting.
Key takeaways
- Staff said the water and wastewater program - has 14 new positions proposed for FY2026 (phased hires; some prorated); and - faces sharply rising debt service related to planned capital and WIFIA/WTD financing. Finance staff said principal and interest for the water/wastewater program are about $22 million in the current year and will roughly double by 2027 and triple by 2029 under current borrowing plans.
- The city's utility-rate model now incorporates updated growth (units), updated annual debt payments and expected impact-fee receipts; staff said a higher-than-expected impact-fee inflow can help ease rate pressure.
- Staff emphasized limitations on using fund balance to avoid rate increases: while cash balances may be used to cash-fund capital purchases or pay down debt, fund balance cannot be counted in the calculation of required debt-coverage ratios when demonstrating capacity for loans.
- Staff noted an estimated ending combined fund balance for FY2026 near 29% of reserves; a portion must be set aside for bond covenants and bond reserves (staff reported a WIFIA/TWDB reserve near $6 million as an example), reducing the immediately usable fund balance. Staff said it would provide a precise usable-dollar figure on request.
Debt and timing
Finance staff presented a projected debt-service schedule showing a significant debt-service ramp tied to planned treatment-plant and system investments. The presentation showed the debt-service profile driving much of the model's rate projections and noted that cash funding projects now would reduce future borrowings and therefore lower future debt service.
Master fee schedule changes (high-level)
Staff and department leads described proposed updates across multiple fee categories. Highlights included: - Planning and permitting: new or increased fees for zoning re-notification after postponement, certain site-disturbance permit tiers and administrative professional-service reimbursements. A new site-registration fee was proposed to simplify long-term food-truck permitting. - Building and inspections: higher meter-installation charges for multiple meter sizes, higher residential trade/inspection charges and new, graduated commercial review tiers. Apartments were given a dedicated fee structure (example cited: a flat base fee plus per-unit charge for multifamily review). - Temporary Certificate of Occupancy (TCO): staff proposed a stepped schedule to shorten long TCO use, with initial fees and higher renewal fees; after repeated renewals the fee escalates (the intent is to reduce projects lingering on TCO status). - Parks and rentals: pavilion reservation windows were shortened to allow staff additional cleanup time before park curfew; several pavilion and event fees would increase to better reflect staffing and maintenance costs. Staff said some fees remain subsidized and the increases are not full cost recovery. - Events and field use: new event-impact and field-prep fees, an excess-allocation fee for sports associations requesting more hours than their basic allocation, and a new lighting fee for night use of athletic fields.
Staff noted many fee changes are intended for cost recovery of staff time, third-party services, or additional maintenance resulting from heavy use.
Public questions and council follow-up
Council members asked for more detail on the unit-growth assumptions embedded in the rate projections (staff said model growth projections use unit counts rather than population growth and that the current model assumes roughly 400 new units per year). Councilmembers also asked for a clear dollar figure of the fund balance available after required reserves and bond covenants; staff said they would provide the exact number.
Timing
Staff said they will continue rate-model updates and will present budget workshops in August with adoption scheduled in September.
Speakers quoted in this article are limited to the speaker list below and drawn from the transcribed meeting.
