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Fulshear officials lay out water and sewer rate options to cover $195 million in planned projects
Summary
Consultants and city staff told the council Nov. 18 that water and wastewater rates must rise to fund roughly $195 million in capital projects over five years; staff presented three wastewater-rate scenarios and modest multi-year increases to water charges and recommended continued public engagement before final action expected in December.
City staff and a rate consultant presented a five-year water and wastewater rate study to the Fulshear City Council on Nov. 18, saying most of the rate pressure stems from nearly $195 million in planned capital projects the city anticipates issuing bonds to cover.
Nalisa Hedden, the consultant who led the cost-of-service and rate-design analysis, told the council that the exercise sought to translate infrastructure and debt into a sustainable revenue plan. "When the well is dry, we learn the word water," she said, summarizing the study's argument that the city must shift costs into rates to pay for treatment, transmission and storage improvements rather than relying on past developer-funded capacity.
The presentation outlined projected revenue requirements rising from about $7.6 million for water in 2026 to $12.8 million by 2030, and wastewater needs that climb sharply as new debt comes online. Hedden said impact-fee collections and legal restrictions on how those fees may be used reduce the share of capital that can be recovered from development, leaving about 80% of new debt service to be paid from rates.
City staff and the consultant offered three wastewater-rate options and a recommended water-rate schedule phasing increases across 2026–2028. Under the water recommendation, the base fee for a typical 0.625–0.75-inch residential meter would rise from $13.44 to $14.11 in 2026 (about a 70¢ change to a typical bill), with additional, larger volumetric increases for heavy users. Hedden framed the rate structure as conservation-focused: small residential usage would see minimal increases while high-volume irrigators and commercial users would face steeper per‑gallon charges.
For wastewater, the study presented three choices that trade off base-charge increases and changes to the winter-averaging base (the city currently uses a 5,000-gallon winter average). Option 1 keeps the 5,000-gallon base and raises both base and volumetric charges; Option 2 is more aggressive on the base charge; Option 3 phases the base down from 5,000 to 2,500 gallons over three years while making the base charge modestly higher so volumetric rates are lower for very large users. Hedden and staff showed sample bills to illustrate the effects: a household with a 5,000-gallon winter average would see a relatively small base change, while larger users would see larger increases.
Council members pressed staff on assumptions behind growth and customer counts, the treatment of out-of-city wholesale customers and the effect of impact-fee timing. Ben (city staff) said the projections factor in new and growing neighborhoods (including Tamarind West and ForSure Lakes) and the city’s wholesale relationships; he and staff noted some uncertainty and said the numbers should be revisited frequently in a fast-growing jurisdiction. Hedden said the team used a cash-basis American Water Works Association model that excludes accounting depreciation and focuses on operations plus debt service.
No vote on rates was taken Nov. 18; staff said they expect to return in December with refined scenarios and additional supporting data (including maps and impact-fee collection forecasts) for a possible formal decision. Hedden and staff emphasized that the council can run alternative scenarios (for example, different tier breakpoints) before adopting a final rate plan.
