Austin Water forecasts multi‑year rate increases to fund $2.8B capital plan including $1B Walnut Creek expansion

Austin Water staff on June 2 laid out a five‑year financial forecast that calls for phased rate increases through fiscal 2030 to fund a sharply larger capital program, while using cash financing, defeasance and low‑interest loans to limit near‑term rate shocks.

Joseph Gonzales, assistant director of financial services for Austin Water, told commissioners that the utility expects rate increases to peak in fiscal 2026 at just over 9 percent before tapering toward inflationary levels in later years. Gonzales said the utility plans to phase those increases to reduce the immediate burden on residential customers and that staff expects a $10 million budget shortfall in fiscal 2026 as part of that phasing strategy.

The nut of the forecast is the utility’s expanding capital program. Austin Water’s adopted five‑year capital plan (the current working plan) was about $2.3 billion; staff proposed rolling the plan forward and increasing the five‑year program to roughly $2.8 billion, largely to program the Walnut Creek wastewater treatment plant expansion and upgrade, a project Gonzales described as a roughly $1 billion, generational investment.

Because large projects have long service lives, Austin Water is proposing to modify its cash‑financing policy for generational projects. The existing policy targets 35–50 percent cash…