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Georgetown Utilities & Customer Care

2020 Water Rate Study information

City Council approved new residential water, wastewater, and solid waste rates at its regular meeting Tuesday.

The new water and wastewater rates come after a cost-of-service rate study was completed this summer by consultants NewGen Strategies and Solutions. The study helped determine the rates and rate structure needed to equitably fund the water utility, including all costs associated with operating, maintaining, and expanding the utility.

The new water rates include an increase of $1.50 to the average residential customer’s base rate. The change also includes reducing the number of tiers for the volumetric rate to help meet the council’s conservation goals.

For the average water user using 10,200 gallons per month, the monthly water bill will increase to $46.25 from $40.98.

The council also approved increasing residential wastewater rates, which, for residential customers, will increase to $34.85, up from $32 per month.

The new water and wastewater rates go into effect Jan. 1, 2021.

As part of the study, NewGen reviewed the costs associated with operating, maintaining, and expanding a utility and projected those costs over the next five years to determine the revenue required to cover those costs. In addition to expenses, the cost-of-service rate study also evaluated how the different types of customers, such as residential, industrial, and commercial users, used the system to make sure each type of ratepayer is paying their fair share and treated equitably.

On this page, we have provided a brief summary of the cost-of-service study results, answers to frequently asked questions, presentations and timelines, and a brief history of water rates in Georgetown.

Study results

The consultant conducted a cost of service study with a 5-year forecast for Georgetown’s water and wastewater service to identify what each customer class should be paying given their use of the system. NewGen found there is inequity among the classes. As it stands, residential and government are not paying what it costs to serve them, while other classes, such as commercial, are subsidizing this gap. The study also identified that under current rates, the utility would not collect enough revenue beginning in FY2021 to pay for the cost of operations including long-term capital projects.

Council discussions and presentations

The cost-of-service analysis was presented to City Council on Aug. 25. The Council is expected to consider adoption at its Oct. 13 meeting for first reading and for second reading at the Oct. 27 meeting. If approved, new rates would go into effect Jan. 1, 2021.

Timeline of Presentations

To see council agendas, visit agendas.georgetown.org.

Frequently asked questions

Why is the City doing a water rate study?

As an industry best practice and according to the City’s Fiscal and Budgetary Policy, the City is required to conduct a rate study for its utilities every three years. The City’s last rate study was in 2018, which led to changes to commercial water rates and wastewater rates. Residential water rates were not changed. According to the 2018 study, the City’s water rates were forecasted to generate lower revenues than necessary to maintain the system in Fiscal Year 2021; however, because of increased peak demand, several capital improvement projects have been accelerated and additional revenues will be needed sooner than forecasted. The City hired NewGen Strategies and Solutions to conduct a cost-of-service water rate study in summer 2020. The study will provide rate options for the next five years given forecasted revenue requirements.

Accelerated capital improvement projects for the water utility include:

Lake Water Treatment Plant expansion: Design in process on expansion of intake and treatment capacity. Construction to start in early 2021 and complete in 2023.

Southwest Bypass Waterline: In design and expected to be complete summer 2021

New South Lake Treatment Plant: Design and permitting work underway; projected completion 2025-27

These projects are expected to help increase water treatment capacity.

What is included in a rate study?

A rate study reviews all of the costs associated with operating, maintaining, and expanding a utility and projects those costs over a period of time to determine the revenue required to cover those costs. In addition to expenses, cost-of-service rate studies also evaluate how the different types of customers, such as residential, industrial, commercial users, use the system to make sure each type of ratepayer is paying their fair share and treated equitably.

How are rates determined?

The recommended rates come from the rate study and are specifically designed to cover the costs of the utility, address customer type equity, and any other policy goals of City Council, such as encouraging conservation. By law, rates may be set only to recover the cost of providing service. Once the rate study is concluded, rates are recommended to the Water Utility Board and City Council.  The Water Utility Board recommends rates to the City Council who approves new rates by City ordinance.

What does my water rate pay for?

The water and wastewater rates pay for the costs of operating the utility including personnel, maintenance, water resources, administration, debt service, and capital construction.

When was the last time water rates were adjusted?

Water rates were last adjusted for residential customers in 2014. Nonresidential water rates were changed in 2019.  Sewer rates were updated for all customers in 2019.

How does growth pay for CIP projects/expansions?

Growth helps pay for system capital expansion through the collection of impact fees assessed to new residential or commercial buildings when new customers are connected to the system. These new customers also increase total monthly revenue to help with the fixed and variable costs of operating the utility

Does the utility receive and use tax dollars to pay for operations?

No. The cost of operating the water utility is paid by customers through rates.  The water utility does use services from general fund departments such as human resources, finance, and IT. However, these services are paid for through a fund transfer to the general fund. The water utility also transfers a return on investment and franchise fee to the general fund. All of those costs, whether direct or indirect costs of the utility, are included in rates paid by customers.

History of water rates in Georgetown

The Water Utility is funded solely by the rates paid by its customers, impact fees paid by builders for new connections, and proceeds from bond issuance for capital projects. The utility reviews its rates and impact fees every three years to ensure the costs to operate the utility are covered by the combination of rates, impact fees, and bond issuance. The current water rates were implemented in 2014 at the same time as the consolidation with Chisolm Trail Special Utility District.

The most significant change to the rates in 2014 was the structural changes to the rates to ensure the fixed costs of the utility (those not determined by actual water usage) are properly collected in the base rate. A rate study implemented in 2018 resulted in the creation of tiered rates for non-residential customers and an increase in the flat-rate sewer charge to residential customers.

The rate study completed in 2020 was done a year early due to the anticipated need for additional revenue to help fund significant water and wastewater projects that have been accelerated to meet customer demand. The changes in water rates are the first in seven years, while the change in sewer rates comes only two years after the last change in 2019. The 2018 rate study predicted the sewer rate would need to be increased in 2020.

What is cost of service?

A cost of service reflects how the total water utility cost is spread or allocated to the customer classes based on their usage of the system. This cost of service method determines how to equitably allocate the revenue requirements among the various classes of service. The cost allocated to the customer classes is based on the utility’s revenue requirement. The revenue requirement is the level of income necessary for the operation and maintenance of the water utility and helps determine how much revenue needs to be recovered with water rates. Not all customers consume in the same manner or require the same facilities to be served, so a cost of service study answers what cost differences exist to serve the various customer classes of service. This helps in identifying rate setting to ensure all customer classes are paying their fair share based on the data.

Adopted rates

Base water rates (inside city limits)

Current Adopted*
5/8 inch $15.50 $16.50
3/4 inch $23 $24.50
1 inch $38.50 $41.00
1.5 inch $76.50 $81.45
2 inch $153.50 $163.40
3 inch $368 $391.75
4 inch $644 $685.55
6 inch $1,410 $1,501
8 inch $2450 $2,608.10

 

Base water rates (outside city limits)

Current Adopted*
5/8 inch $18.50 $19.80
3/4 inch $27.50 $29.45
1 inch $46 $49.25
1.5 inch $91 $97.95
2 inch $183 $196.40
3 inch $440 $470.95
4 inch $770 $824.15
6 inch $1,686 $1,804.50
8 inch $2,929.50 $3,135.40

 

Volumetric rates (per 1,000 gallons)

Current

Adopted*

Gallons Cost Gallons Cost
0-10,000 $1.75 0-7,000 $1.85
10,001-20,000 $2.40 7,001-15,000 $2.75
20,001-40,000 $4 15,001-25,000 $4.80
40,001-60,000 $6.50 25,000 and more $8.40
60,001 and more $8.50

*Adopted rates effective Jan. 1, 2021.

Contact us

For more information, please contact:

Mayra Cantu, management analyst
mayra.cantu@georgetown.org

Glenn Dishong, Water Utility director
glenn.dishong@georgetown.org

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