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Dripping Springs staff shows three utility-rate scenarios; council asks for smoother increases
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Summary
City staff presented three utility-rate scenarios that keep a 30-day (≈8.3%) utility fund balance while varying general-fund contributions and base/usage fees; council asked staff to run smoothing options and return recommended rates at the first May meeting.
City staff presented a continuation of the utility rate study at an April 21 workshop, laying out three modeled scenarios that maintain a roughly 30-day (about 8.3%) utility fund balance while varying how much the general fund contributes and how wastewater and water fees are structured.
The presentation, led by Sean, summarized the HDR model and three alternatives: higher general‑fund support paired with a lower wastewater base fee; intermediate support with a midlevel base fee; and lower general‑fund support with a higher base fee but slightly lower volumetric usage charges. "This is kind of the sausage being made," Sean said while walking council through the technical sheets and long-range projections. Staff emphasized the model runs out to 2032 to capture the effect of debt service on an anticipated wastewater loan of about $50–51 million.
Why it matters: the scenarios trade off up-front bill impacts for longer-term fund stability. In the model, Scenario 1 (30% general-fund contribution) showed lower base fees but larger early-year reductions in customer bills because the outside revenue softens the base increase; Scenario 3 (20% contribution) showed higher base fees but lower usage rates.
Council members pressed staff on assumptions and the customer experience. One council member noted the appearance of large year-to-year jumps in early years and urged smoothing those hikes so increases are more predictable for residents. Sean said he had tested smoothing but that lowering early increases in some runs caused the model to dip below the 30‑day fund-balance floor and that he could re-run the model to illustrate smoother multi-year alternatives. He confirmed he plans to add a historical slide showing the base fee over the last 5–10 years to put proposed changes in context.
What’s next: staff said it can run the smoothing and alternate general‑fund contribution scenarios quickly and expects to bring recommended rates to the council at the first May meeting, with adoption requested at a May meeting thereafter. "We're anticipating the first meeting in May having rates for y'all to consider adoption," Sean said. Council asked staff to provide additional scenarios (including a multi‑year smoothing option and a $2–2.5 million general‑fund contribution example) before the next meeting.
