Buda residents may be seeing an increase in water and wastewater rates in the new fiscal year because of various water and wastewater capital improvement projects, the new wastewater treatment expansion and the agreement with Alliance Regional Water Authority regarding the pipeline being built.
Finance Director June Ellis introduced the item during a special budget workshop July 18 and informed Buda City Council members that staff didn’t need any action on the item, but he would appreciate their input on the proposed rate increases.
Grady Reed with HDR Engineering explained that water/wastewater rates had to increase to help cover the cost of the additional water projects the city has planned. He said the water/wastewater fund could be utilized to keep rate increases within moderation.
Reed said if the city were to raise the water rate by 6% and the wastewater rate by 3% next fiscal year, then future rate increases could be kept between 2% to 10%. The increase would fill the fund balance by 2022, helping to alleviate rate increases.
Debt of $23.5 million will be issued in FY 2018 for the wastewater treatment plant expansion.
Reed said that even with the increase in water/wastewater rates Buda would still be below the rates of both San Marcos and Kyle.
Reed explained that the rate increase, while daunting, would be temporary as Buda has to deal with the agreement with ARWA, the expansion of the wastewater treatment plant and multiple water projects at the same time. All the expansions are being made to deal with Buda’s rapid growth.
Council member George Haehn wanted to know if the city could still maintain the $2.75 million set aside to serve the city’s annual debt.
“If we increase rates this year by 6% in water rates and 3% in wastewater rates and use the water/wastewater fund balance you will be able to keep rate increases low,” Reed said. “We’re trying to use that fund balance and cash fund some projects to keep rates low so people will keep moving to Buda.”
The decision to increase water/wastewater rates will not be adopted until September 2017 when the entire Fiscal Year budget will be voted on by council.