Rowlett council leans toward modest utility-rate plan that preserves reserves

City staff presented four alternative utility-rate scenarios for FY2025 and explained why the previously planned $7,000,000 revenue bond was removed from short-term planning. Staff said the bond was pulled because the city lacked a ready set of capital projects to spend the debt proceeds, and moving forward without projects would needlessly increase rate burdens on residents.

The four scenarios offer trade-offs between preserving days of cash on hand and moderating near-term rate increases. Staff explained scenario 1 preserves higher fund balance; scenario 2 spends less of the fund balance while avoiding a sharp rate increase next year; scenario 3 draws down reserves further; and scenario 4 would yield a small rate decrease now but require a steeper increase later. During the discussion several council members referenced the city policy target of 90 days of cash on hand versus a consultant guideline of 120–150 days; multiple members signaled support for scenario 2 as a balanced approach.

Why it matters: utility rates affect household bills and business costs and are the primary funding source for water and sewer operations. Council’s choice about reserves and rate smoothing will shape multi-year fiscal pressure and capital planning for the water/sewer enterprise.

Supporting details: staff said removing the $7 million bond lowered anticipated debt service and materially changed the rate scenarios. The presentation showed how different scenarios change days of cash on hand and multi-year projections; staff warned that drawing down reserves is a policy decision with long-term implications.

Next steps: staff will prepare full presentations on the scenarios and provide more detailed modeling at the upcoming budget hearings; council members asked for follow-up materials comparing long-term projections and the capital project pipeline.