North Texas Municipal Water District lays out $3.95 billion in projects and warns capital work will drive future rate increases

Jenna Covington, executive director and general manager of the North Texas Municipal Water District, told the Richardson City Council that the district is managing a multi‑system capital program that will require large, phased investments and will be the primary driver of future wholesale rate increases.

Covington said the district serves roughly 2,400,000 people across 13 member cities and 36 direct connections and that water operations account for the largest piece of the district’s $902,000,000 budget. “More than half — $492,000,000 — of our fiscal‑year budget is allocated to capital investment,” she said, adding that the district’s currently open contracts total about $3,950,000,000.

Why it matters: Richardson purchases wholesale water and wastewater services through NTMWD; changes to the district’s cost structure are passed to member cities and are an input to Richardson’s retail rate and budget decisions.

Covington outlined several large projects driving the forecasts: a phased Raw Water Pump Station at Lake Lavonne (a $619,000,000 program broken into multiple work packages), capacity expansions at the Leonard Water Treatment Plant (current phases to double then further increase average daily capacity), and regulatory‑driven backup‑power improvements at the Wylie plant in response to Senate Bill 3 following winter‑storm power outages. On the wastewater side she highlighted the newly operating Sister Grove Water Resource Recovery Facility and ongoing peak‑flow expansions at Rowlett and Wilson Creek plants.

Covington said the district has taken steps to reduce near‑term rate pressure: contract restructuring and phasing large projects into work packages rather than funding full debt up front, and pursuing subsidized state funding. “We’re saving $22,600,000 in fiscal year 26 through seeking Texas Water Development Board funds,” she said.

Council members pressed for details on timing, new supplies and system reliability. Covington said the district has launched a five‑year update to its long‑range water‑supply plan and expects an 18– to 24‑month study cycle; she said new-source work includes lower Lake Lavonne intakes, additional Texoma blending at the Leonard plant and other options. Asked whether the oft‑cited horizon for additional supplies (commonly discussed as 2036) had moved, she said growth has been faster than earlier projections and that the long‑range plan will reassess the date.

On conservation and efficiency, Covington highlighted a homeowner‑association irrigation evaluation pilot that staff say produced an estimated 67% reduction in irrigation water use for evaluated HOA common areas (about 8.7 million gallons saved and $57,650 in annual bills for the pilot participants). “The cheapest water we’ll ever get is conserved water,” she said, pointing to reuse and demand management as central strategies.

Council member concerns and staff follow‑up: Members asked for timelines of district projects, clarification of how contract templates and rolling‑average methodologies affect the rate forecast, and more detail about maintenance and monitoring after recent pipe failures in the region. Covington said staff will continue to provide monthly long‑range water‑supply updates to the district board and to member cities.

What’s next: The NTMWD presentation will inform Richardson’s upcoming retail‑rate and budget deliberations; council members directed staff to use the district’s projections in Richardson’s FY27 budget work and asked for follow‑up materials with project timelines and contract assumptions.