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Llano officials discuss water-rate scenarios; no vote taken
Summary
City staff presented multiple water-rate scenarios and recommended further study of 'Scenario 6' to ease bills for lower-volume users while addressing dam debt and water-reservation costs; council asked for more detailed line-item analysis and asked staff to return with refined options.
City staff led an extended discussion of proposed water-rate changes and the city’s utility finances but did not adopt a new rate. The presentation laid out multiple scenarios from a recent rate study and emphasized short-term debt-service pressures and long-term capital needs, including previously discussed financing for a dam assessment and an LCRA water-reservation agreement.
City Manager Finley (presenting staff analysis) said the proposal’s starting-point approach would be to take a smaller, one-year increase that ameliorates immediate shortfalls while allowing staff to refine longer-term plans. "Scenario 6 does provide greater relief to current rates, for people that use 6,000 gallons or less per month," Finley said, adding that the city’s average residential water use is about 4,200 gallons per month.
Finley outlined drivers behind the study: debt service tied to a previously discussed $3,500,000 loan/grant for dam assessment and possible extension, projected costs associated with a water reservation from LCRA, and operating overhead that staff said had been running at a deficit. He said the initial methodology included a readiness-to-serve increase of $10 plus changes to volume-tier pricing; staff provided comparisons showing Scenario 6 lowers the relative bill impact for many low- and mid-range residential users compared with a previously modeled Scenario 4.
Council members pressed staff for more granular budget line-item detail and asked whether operating expenses could be reduced to offset revenue needs. One council member noted that Scenario 6 likely lowers first-year revenue relative to Scenario 4 and asked whether capital projects could be shifted or expenses trimmed to balance the change; staff recommended additional analysis and a return to council with refined scenarios and a one-year focus before any formal vote.
No formal rate ordinance or resolution was adopted at the meeting; staff will return with additional information and updated exhibits for a future council meeting.
