League City consultant outlines utility rate increases to fund $468 million capital plan

A consultant presented a long-range financial plan to the League City City Council on Jan. 14 that shows current water and wastewater rates are insufficient to cover operating costs, debt service and roughly $468 million in capital projects over the next five years. Chris Ehrcutt, principal at NewGen Strategy and Solutions, told the council the study recommends phased rate increases beginning April 2025, including a 9.9% increase for an average residential customer under the firm’s proposed plan.

Ehrcutt said the utility must ensure “revenues have to match or exceed expenses,” adding, “If we don't, no pun intended, we're underwater.” The consultant recommended a strategy of gradual, multi-year increases to preserve intergenerational equity for capital projects paid with debt and to give customers time to adjust to higher monthly bills.

Why it matters: The plan is intended to fund major system projects the consultant cited as the primary drivers of increased costs. Ehrcutt identified three large projects that together account for the bulk of the five-year spending: replacement of a transmission line from the southeast plant to the Highway 3 pump station (about $100 million), expansion of a west-side wastewater treatment plant (just under $100 million), and a planned expansion of the southeast Houston water plant…