North Texas water district proposing 11% rate increase for member cities

Cities that receive solid waste services from the district will see no change in the proposed rate during the upcoming fiscal year with a charge of $38.25 per ton expected, said Jeanne Chipperfield, NTMWD deputy director of administrative services. NTMWD Public Communications Manager Kathleen Vaught said all proposed rate changes are still under review and refinement by the NTMWD.

Richardson Director of Communications Greg Sowell said city officials did not know how the proposed changes would affect residents’ water bills.

All presented rates are the same proposals for other NTMWD member cities, which include Plano, McKinney and Frisco. Final projections for water, wastewater and solid waste rates will be given to member cities at the end of July, Vaught said, adding she expects the wholesale water rate to be below the June 5 estimates.

Quote of note

“There’s not many businesses that can pass 11%, 10%, 12% [or] 15% [increase] to their customers and stay in business,” Council Member Ken Hutchenrider said. “I would once again [ask], on behalf of all of our residents and constituents, that [the NTMWD] continue to hone in on that as much as possible. I constantly worry as I continue to see our water and wastewater rates go up.”

The backstory

As part of acquiring water for residents, cities receive an annual minimum allocation based on historical usage. Prior to finalizing a contract renegotiation in October 2020 among member cities, the NTMWD set the benchmark at the highest annual water demand a city had, meaning cities were required to buy water equal to the most usage in a calendar year.

New standards have established a methodology for determining annual minimums, which cities can reduce over time if their consumption underperforms expectations. Vaught said the new formula will be phased in over 13 years until 2033 and allow cities to reduce the amount of water they are required to buy if their usage is below the purchased amount.

Richardson and other cities below their annual minimums are able to receive a prorated reduction of one-third of the overages or increases to the minimums from the entities which exceeded their minimums, Vaught said, because of provisions in the new contract. Cities over their annual minimum allocation will see an increase the following year for the full overage amount of water allocated.

“Coming out of that [October 2020] Public Utility Commission settlement, I’ve been very pleased with the regional perspective, collaboration and strong working relationship among the member cities,” said Jenna Covington, NTMWD executive director and general manager.

By 2029, Vaught said the amount billed to cities will be based in part by annual minimums and actual water usage. Starting in 2033, the annual minimum will be based on a rolling five-year window of water usage.

Covington said the city of Richardson has seen its annual minimum allocation decrease over the last few years. Figures provided by Richardson City Manager Don Magner indicate a reduction from over 11 billion gallons in FY 2020-21 to about 10.59 billion gallons in the current fiscal year.

Magner said the city has seen around $1.47 million in savings during this fiscal year because of reductions to the city’s required water purchase.

Editors note: This article has been updated to clarify the wholesale water rate increase is expected to be below the 11% June 5 estimate and to clarify that cities are able to receive a prorated reduction of their annual minimum based on overages from other entities.