City staff are recalculating the fund, which balances the city’s water revenues and operating expenses, in order to reflect the North Texas Municipal Water District’s proposed 10 percent water and 22 percent waste water treatment rate increases for its member cities, Budget Director Karen Rhodes-Whitley said. She is expected to provide city council members with another update next month.The NTMWD's board of directors is expected to approve the district's proposed increases next month.
Plano pays approximately $61.2 million for 26.7 billion gallons of water annually. NTMWD member cities like Plano pay a flat rate for their water each year, which was set in 2001 based on each city’s highest usage at that time. Plano is the NTMWD’s largest customer and has used 17.9 billion gallons of water in 2015.
The district refunds a percentage of what each city pays for undelivered water.
Plano staff is proposing to transfer $1 million from its $6.8 million water and sewer reserve fund to help offset the increases, Rhodes-Whitley said. Staff is also proposing the issuance of $21.4 million in revenue bonds to fund four major city water and sewer projects. This is the first time Plano has issued a debt for water and sewer projects since 1993, Rhodes-Whitley said.
“Conservation is the right thing to do, [but] the more residents conserve, the higher the rate goes. Sometime the model [is going to] break.”
–Plano Deputy Mayor Pro Tem Ben Harris
“Due to the fact that these are such large projects, they have got to be done and we cannot go in and cash fund $21 million due to all North Texas Municipal Water District contract costs that we’re having to absorb,” Rhodes-Whitley said. “[If we cash funded this] we would have to increase rates on both sides by 30 percent.”
With conservation efforts in place, most member cities are using less water than what they are purchasing, leaving additional funds to be allocated to future projects by the NTMWD, according to district documents. However, some Plano leaders are questioning the member city contracts’ sustainability and how they fit in with today’s conservation efforts.
“Conservation is the right thing to do, [but] the more residents conserve, the higher the rate goes. Sometimes the model breaks,” Deputy Mayor Pro Tem Ben Harris said. “We’ve got to have a conversation about water because … we cannot maintain that trajectory.”
