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Northlake consultants propose phased water and sewer rate increases to fund $52M in projects
Summary
NewGen and town finance staff presented a rate plan that begins with a 5.5% increase and structural changes to tiers (phasing the top tier to 2× the base) to preserve reserves and finance roughly $52 million in projects over five years; council will consider action in December for a Jan. 2026 effective date.
Town finance staff and consultant NewGen Strategies and Solutions briefed the Northlake Town Council Nov. 13 on the town's water and sewer finances and a multi‑year rate plan.
John, the town finance presenter, said the town ended the fourth quarter with an approximate book value for cash and investments of $114,000,000 and total interest earnings of about $1,300,000; he noted a 7% quarter‑to‑quarter book‑value decrease driven largely by capital spending tied to projects such as the Star Center building and site infrastructure.
Matthew Garrett of NewGen said the rate study recommends smoothing increases over a five‑year horizon rather than one large catch‑up increase. The recommended plan begins with a 5.5% increase, followed by 5.75% and then smaller baseline increases later in the period. Garrett also recommended changing the rate structure to move the highest volumetric tier from 1.75 times the base to 2 times the base rate to signal high users to conserve and to protect the town's reserve balance. Garrett said the town faces roughly $52,000,000 in projects over the five‑year horizon and stressed the plan is meant to preserve debt service coverage and reserve levels.
Council discussed what would happen if rates are not changed, with staff and the consultant warning of potential rating‑agency impacts, increased borrowing costs and the risk of regulatory fines if required projects are delayed. Garrett and staff said the plan would be evaluated yearly; council received the report and staff said an action item will be on the December agenda with an intended effective date in January 2026 if adopted.
Key figures from the presentation: fourth quarter book value ~$114 million (John); total interest earnings ~$1.3 million (John); $52 million in projected capital needs (Matthew Garrett); proposed initial rate increase 5.5% with structural tier change raising the top tier to 2× the base rate.
Next steps: Council will have the rate ordinance on the December agenda and asked staff and consultants to be available to answer questions before any formal vote.
