Title
Conduct a presentation on the FY24 Utility Cost of Service Study and Rate Recommendation.
Summary
Staff has worked with NewGen Strategies and Solutions (NewGen) on a cost of service and rate study analysis for the City of Pflugerville's water and wastewater rates. Historical data and future projections were considered as were assumptions related to customer growth, cost inflation, and interest rates on proposed debt. The 5 year capital improvement program, which includes infrastructure projects necessary to maintain the existing systems and add capacity for growth, is a large portion of the anticipated future spending on both the water and wastewater utility systems.
Grant Rabon of NewGen will be presenting the results of this study.
This item has been included as a presentation item on the agenda to allow for presentation and discussion, in which consideration of the recommended increases are included in the Master Fee Schedule Ordinance that will be included on the agenda for budget adoption with first reading August 22nd, and second reading and final adoption on September 12th.
As we have seen erratic cost fluctuations over the past 3 years with both interest rates as well as construction costs, City staff found it prudent to update the rate model to reflect the ever-changing economic climate to ensure the water and wastewater utility fund can continue to operate within the bounds of our debt obligations while also ensuring we fulfill our reserve requirements now and into the future. Included in the attached presentation is an analysis of the proposed change in an average monthly residential customer bill for the next five years. The average residential customer has been assumed to have a 5/8” meter, use 8,000 gallons of water per month and have a winter wastewater average of 5,000 gallons.
The proposed wastewater rate changes shown in the presentation are for customers inside the city limits. The proposed rate structure adjusts the wholesale...
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