Richardson hears detailed water and sewer rate study; staff favors meter‑equivalency plan with senior discount

Richardson City Council on June 8 heard a comprehensive water and wastewater rate study from Willdan Financial Services that lays out three different multi‑year rate scenarios to fund roughly $80–85 million in capital improvements and rising wholesale costs from the North Texas Municipal Water District.

In a presentation that ran nearly two hours, Dan Jackson, vice president at Willdan, told the council that the city faces significant cost pressure: North Texas is projecting near‑term wholesale increases (Jackson cited roughly 9% this year and projected higher increases in subsequent years), and Richardson must borrow to complete its capital plan. Jackson said the city currently charges an $8 monthly base for water and wastewater — unusually low for a city Richardson’s size — and sells about 8.5 billion gallons a year.

Why it matters: the study is intended to produce a long‑term, revenue‑stable structure that covers operating costs, debt service and capital work while balancing equity among residential and large commercial customers. Willdan modeled three options: (1) a status‑quo uniform percentage increase (roughly 10% per year for three years for an average residential user under the scenario Willdan labeled “status quo”), (2) a meter‑equivalency plan that raises fixed monthly charges based on meter size and reduces volumetric rates, and (3) the meter‑equivalency approach plus a senior‑citizen base‑charge freeze for qualifying small meters. Under all three alternatives Willdan’s model is revenue neutral overall — the difference is who pays and how the increases are distributed.

Jackson said the meter‑equivalency option reduces volatility by recovering more revenue through fixed charges and better aligning costs with capacity; the senior‑discount variation reduces the burden on low‑usage older households. “The decision you as a council have is: who do you get the revenue from?” Jackson said. He estimated that moving to the status‑quo percentage increases would see an average customer paying about $133 per month in November (about $12 more than the current $121 average for 10,000 gallons of water and 5,000 gallons of wastewater), with additional similar increases in subsequent years under that scenario.

Council and staff reaction: City staff endorsed option 3 and stressed the need for a three‑year planning horizon. City management said the proposed rate plan would allow Richardson to maintain a healthy fund balance and to sell $80M+ in bonds to finance capital improvements. Council members pressed for details on meter sizing, the number of large meters in the system, how population and usage forecasts were modeled, and how a senior discount would work in practice. Council Member Dorian said she supported option 3 to protect seniors; Council Member Justice suggested a mechanism to avoid repeatedly forcing a small business or resident into burdensome reauthorization if the council revisits the plan. Several council members asked staff to provide the specific input assumptions (e.g., North Texas price paths, growth and meter counts) in advance of the June 22 follow‑up.

Next steps: staff is not asking for a decision tonight. The council’s next discussion on rates is scheduled for June 22, when staff will return with additional materials and any refinements requested by the council. Jackson emphasized that while rate increases are unpopular, they are driven by rising wholesale costs and long‑deferred capital needs.

Quoted: Dan Jackson (Willdan): “Water is a business… you produce a product… you have to set rates at a level where you have the ability to pay it back.”

Council Member Dorian: “Keeping water rates for senior citizens — I’m hoping we could look at that as a key option.”

Staff note: staff recommended scenario 3 (meter equivalency with a senior discount) and will return June 22 with more detailed inputs and the recommended implementation schedule.