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Utility staff recommend keeping $6 million Lake Benbrook reserve to avoid customer surcharge
Summary
Utility staff advised retaining an $800,000 annual transfer and a $6,000,000 target balance for the Lake Benbrook pumping reserve to avoid surcharging customers during drought; the board heard FY26 rate projections and asked about pumping timing and drought assumptions.
Utility staff presented the annual update to the Lake Benbrook Pumping Reserve Fund policy and recommended continuing an $800,000 annual transfer and maintaining a $6,000,000 target reserve to mitigate the need for a customer surcharge during drought.
Rick Schafer told the board the reserve currently holds about $4.6 million after transferring $800,000 in FY25 and said the policy is designed so "we are prepared for the next drought of record or short term drought to be able to cover those additional costs ... without having to add a surcharge to customers' accounts." He reviewed a financial model built on projected FY26 water usage, a new six‑year electricity contract with Constellation (about 2¢/kWh higher than the prior Reliant Energy contract), and Tarrant Regional Water District (TRWD) projected rates for FY26 that include three tiers (tier 1 Sunshine Lake pumping, tier 2 Benbrook allocation, tier 3 higher-volume water).
Board members asked about operational details and benchmarks. One member asked whether the drought-of-record benchmark is the 1950s event; staff replied, "Yes, sir. It is," and explained the $6,000,000 target in the model would carry the utility through that multi-year drought scenario with the reserve drawn to zero while combined with operating funds. Members also asked when tier 1 pumping typically occurs; staff said the city generally begins pumping tier 1 in August if lake elevations require it and uses one pump to minimize electricity costs.
No formal action was required by staff at this meeting; staff recommended continued annual monitoring and review of the policy and left the matter open for future adjustment as modeled demands, rates and reserve balances change.
