Austin Resource Recovery outlines 5-year forecast, cites Northeast Service Center and vehicle replacement as drivers of rate increases

Austin Resource Recovery presented its five-year financial forecast to the commission on an April meeting, projecting a fiscal 2026 budget of about $144.1 million, a roughly 9.5% increase from fiscal 2025 and citing the city’s planned Northeast Service Center as a key driver of future rate increases.

The forecast covers operating costs, planned capital spending and rate assumptions that the department will propose to the City Council in July. "This is the forecast. This is not the proposed budget," Victoria Reer, finance division manager for Austin Resource Recovery, told commissioners. She said the proposed budget will be presented to council in July and that ARR plans to return to the commission with the formal proposal for a recommendation vote.

Why it matters: the forecast shows how ARR expects to balance service needs, vehicle replacement and debt service while meeting the city’s 30-day operating reserve policy. The construction and subsequent debt service for the Northeast Service Center are the largest single drivers of the projected rate changes over the five-year period.

Key forecast details and context

- Forecast totals and drivers: Reer said the department’s fiscal 2025 budget was $134.5 million and that the department’s forecasted fiscal 2026 budget is $144.1 million (a 9.5% increase). The forecast includes about $13.4 million dedicated to vehicle replacement in 2026 and, on average, about $13 million per year for vehicle replacement over five years.

- Rate changes: ARR’s cost-of-service model in the forecast calls for a $4.10 increase in the base rate over the five-year period and a $0.60 increase in the residential clean community fee across the forecast. Reer said the construction of the Northeast Service Center is a major factor…