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Council questions Waco water contract terms as utility costs rise
Summary
Staff reviewed utility fund pressures and the Waco water contract; staff said 'Waco is charging us $3.59 per thousand gallons,' noted a 500,000 gallon/day take‑or‑pay minimum and discussed how overages and minimums are handled.
Staff told the council that multiple influences are increasing utility expenses, including higher plant run times and external contract rate adjustments. On contract specifics, the Presenter told council that the Waco contract is a take‑or‑pay arrangement and reiterated the city can take up to an approved higher daily allotment; the Presenter stated, "Waco is charging us $3.59 per thousand gallons," and council discussed whether the contract has annual caps and how overage days affect future minimums.
Council members asked whether the city is 'upside down' on costs versus customer rates; staff said current rates — commercial at $5.75 per thousand and residential tiers up to $9.25 per thousand — keep the city from being 'upside down' relative to Waco. The Presenter also described increases in WMAR sewer charges and the utility fund's sanitation pass‑through costs; council pressed on contract renegotiation possibilities and operational adjustments tied to algae and volume changes at the plant.
