City budgets $25M in grant funding for wastewater treatment design; staff flags future rate decisions

CFO Laura Storrs and other staff told council the draft budget includes a large grant—$25,000,000—earmarked for the design phase of Amarillo’s wastewater treatment facilities. Storrs described the inclusion of the grant as “a huge win for our community” and said the budget treats it as grant‑funded capital, not a general‑fund obligation.

The city is also budgeting a proposed 5% water and sewer rate increase aimed at capturing dollars this year for cash‑funded capital and to create options for future capital or early debt funding for the wastewater program. Storrs said that staff intends to “capture those one‑time dollars in the current year” and retain flexibility for rate or debt planning in the following fiscal year when construction and debt service decisions will be clearer.

Council members asked whether staff could step plant operational costs if water use falls in a wet year; staff explained there are static and variable costs at treatment plants — fixed labor and equipment costs remain even if volumes fall, although variable costs such as chemicals and energy decline with usage.

Staff also said a rate study is forthcoming that will provide options for how to phase any larger wastewater‑related rate increases. Storrs told council there’s a “strong chance” the city will need additional rate adjustments later in FY26 depending on the rate‑study results and the construction schedule for a treatment plant project; staff promised scenarios showing both phased increases and one‑time options so council can weigh implementation timing.