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Staff warns city's wholesale water, sewer costs will push bills higher; recommends pass-through adjustments
Summary
City staff outlined Upper Trinity Regional Water District rate increases that would raise wholesale water from $1.56 to $1.72 per 1,000 gallons and proposed targeted wholesale pass-through adjustments expected to raise average monthly residential bills by roughly $2.33 to $3.29 depending on season.
City staff presented projected increases to the Upper Trinity Regional Water District wholesale rates and recommended corresponding adjustments to the wholesale pass-through used in city utility billing.
Heather, a city staff member presenting the analysis, said Upper Trinity's water volume charge will rise from $1.56 to $1.72 per 1,000 gallons, a change staff estimates would increase the city's wholesale water cost by about $133,000 based on projected consumption. Demand charges are expected to add roughly $55,000 (about a 3.4% increase). For sewer, staff reported a volume change from $1.37 to $1.40 per 1,000 gallons and an approximately $48,000 increase in demand and capital charges (about a 3.3% increase). Heather summarized the multi-year position by saying the city faces an $181,000 shortfall in fiscal year 2026 and a cumulative shortfall of about $271,000 when prior years are included.
To address the gap staff recommended modest wholesale increases for water demand (25 cents), water volume (12 cents per 1,000 gallons), and sewer demand (40 cents) with a small per-thousand-gallon sewer-volume increase (4 cents). Staff modeled customer impacts and estimated the average residential bill (excluding summer irrigation months) would rise about $2.33 per month; under summer usage scenarios (about 20,000 gallons) the increase could be about $3.29 per month.
Heather emphasized the recommended changes apply to the wholesale pass-through and do not change the city's retail rate structure. "We are not recommending any adjustments to the city rate, it's just the wholesale rate," she told council members. The council asked clarifying questions about the 17-year cumulative deficit of about $90,000 since the 2008 ordinance separated wholesale charges and how staff tracks annual variance before deciding whether to adjust rates.
Next steps: staff will include the recommended wholesale adjustments in the budget process and return with ordinance language if the council wishes to adopt the pass-through changes.
