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Murphy council hears rate-study options as consultant warns of rising wholesale water and sewer costs
Summary
Consultant Chris Eckert told Murphy council wholesale water costs are rising and presented two rate scenarios — one that raises both fixed and volumetric charges and another that holds the fixed charge steady and increases volumetric rates — with the council leaning toward the latter for lower impacts on fixed-income residents.
Chris Eckert of NuGen Strategies & Solutions presented updated water and wastewater projections and two policy options, telling the City Council the city’s wholesale supplier estimates a roughly $481,000 year-over-year increase in treated-water costs and more than $450,000 in wastewater-treatment costs.
Eckert said the city would under-recover roughly $2.34 million next year if current rates stayed in place and recommended measured annual adjustments to preserve the utility’s fund balance and credit standing. “Last year we were estimating that the cost of water this year would be about $7,140,000…that is about a 7% increase in your cost of water,” Eckert said, and he noted wastewater treatment costs are rising faster than water costs.
Council members focused their questions on customer impacts and the distribution of increases between fixed charges and usage-based (volumetric) rates. Eckert outlined two scenarios: Scenario 1 increases both fixed and volumetric charges; Scenario 3 holds the fixed charge steady and shifts the increase into volumetric rates. Under the higher scenario the average residential bill would rise roughly $9.73 per month; under the scenario that holds the fixed charge the average increase is closer to $9.47 per month for the representative usage Eckert modeled.
Mayor Scott Bradley and several council members said they preferred Scenario 3 because it reduces the proportional burden on low-volume and fixed-income households. “I think that that is fair for our residents that don’t use a lot of water,” one council member said during deliberations. Staff told the council the item will return for a formal adoption vote at the Sept. 2 meeting after council gives direction.
The presentation also covered contractual and regional drivers: Eckert pointed to North Texas Municipal Water District capital investments and a recent shift to a five-year rolling average for take-or-pay calculations, and he recommended passing wholesale cost increases through to customers rather than offsetting them with one-time fund balance draws. City staff flagged water-loss mitigation projects already funded in the current budget that aim to lower system losses over time.
The council’s direction at the meeting was procedural — provide guidance to staff to refine the chosen scenario for formal consideration Sept. 2 — and no rate ordinance was adopted at the Aug. 19 session.
