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Officials flag dire utility needs, propose incremental water and wastewater rate increases
Summary
City staff told commissioners that underinvestment and falling sales tax revenue require a multi‑year approach to water and wastewater finances: an illustrative $1 million revenue goal would equate to roughly 13% for water and 17% for wastewater; staff said a detailed rate study and infrastructure work (meters, generators, sewer capacity study) must follow.
City utility staff told the commission that the water and wastewater systems are underfunded and that a multi‑year rate study is needed to align rates with actual asset and operating costs. To illustrate magnitude, staff presented a scenario in which adding $1,000,000 in each of the water and wastewater funds would require roughly a 13% water rate increase and a 17% wastewater increase.
Staff emphasized several urgent infrastructure tasks: (1) installing generators at water and wastewater facilities to meet a December deadline for resiliency (an estimate for water‑plant generators was cited at roughly $875,000 for purchase alone), (2) completing a citywide sewer capacity and condition assessment (staff cited a $580,000 decision package), and (3) repairing or replacing hundreds of nonfunctioning meters (250+ cited) that are causing lost revenue. Staff also noted an existing wholesale contract with the Ennis power plant that is priced by contract and is not tied to the municipal fee schedule.
Commissioners raised technical points about how to allocate increases between residential and commercial customers, flagged a possible fee‑schedule inconsistency that may have left the first 1,000 gallons unbilled after last year’s changes, and asked staff to carry the $1M placeholder into the budget while returning with a proportionate, meter‑size and customer‑class allocation from the NewGen rate study.
Why it matters: The utility funds are enterprise funds that must sustain themselves; staff said deferring increases and repairs risks failing critical infrastructure, regulatory noncompliance or emergency service gaps.
Next step: Staff will proceed with a multi‑year rate study, return corrected fee‑schedule language (including treatment of the first 1,000 gallons), and bring detailed proposals that proportionately allocate any targeted revenue increases between customer classes.
