Round Rock City Council approves utility rate increases on first reading

The Round Rock City Council unanimously approved on first reading an increase in utility rates at the Thursday, Aug. 22 Council meeting.

The proposed changes require a second reading at the next City Council meeting for final approval. The ordinance aims to update utility rates and deposit requirements to ensure the City can continue providing reliable water, wastewater, reuse water and stormwater services.

Currently, the residential water rate structure is tiered based on usage, with four levels ranging from 0 to over 27,000 gallons. The base rate for a typical residential meter is $16.52 per month, with volume rates increasing as usage goes up, starting at $2.56 per thousand gallons in the first tier and rising to $5.77 in the highest tier. For wastewater service, the base rate is $13.27 per month, with charges based on winter water usage. The stormwater fee is a flat $4.75 per month for residential customers, while commercial rates depend on the amount of impervious surface, like parking lots, that affect water runoff.

The City must build and maintain infrastructure to handle the peak water demand that occurs during a short period each year, typically in August, driven largely by residential outdoor watering for lawn irrigation. While commercial water usage remains consistent, residential usage spikes significantly during these summer months. To accommodate this peak demand, the infrastructure must support the highest levels of usage, even though it is only fully utilized for a few weeks annually. This results in higher production costs during these peak times, necessitating a tiered rate structure to encourage conservation and manage these costs effectively.

If passed on final reading, the water base rate will increase by 5% annually over the next three years, reaching $17.35 in 2024, $18.21 in 2025, and $19.12 in 2026. The tier structure will be revised to further promote water conservation, with the first tier dropping to 0-10,000 gallons and a new fifth tier added for usage over 34,000 gallons. Volume rates for each tier will also rise, with the largest increases in the new fifth tier to discourage excessive water use.

For wastewater, the base rate would increase by 6% annually, reaching $14.07 in 2024, $14.91 in 2025, and $15.80 in 2026. The cost per thousand gallons would also rise by 2% each year. The residential stormwater fee would increase from $4.75 to $6.75 per month, with no further changes planned for the next three years.

The City regularly updates its utility rate models every three years to ensure sufficient revenue is collected for both short-term needs and long-term improvements. These proposed changes are due to rising operational costs, such as for chemicals, power and other essential services. Additionally, the City faces significant expenses related to large infrastructure projects, including the expansion of regional water and wastewater treatment plants, which are crucial for future growth and maintaining service reliability. The City is spreading the rate increases over three years to allow customers to adjust gradually. The revised tier structure for water rates is also intended to encourage conservation by making higher usage more expensive.

If the ordinance passes the second reading, these changes will take effect for billing periods starting after Nov. 1, 2024. This approach will help the City maintain high service standards while managing the financial demands of growth and infrastructure development.

Upcoming Utilities Projects

Over the next five years, the City of Round Rock is engaged in significant regional water infrastructure projects to ensure the long-term availability and reliability of water for its residents. These projects represent a combined investment of $256 million, with Round Rock responsible for a substantial portion of the costs.

One of the key projects is the BCRUA (Brushy Creek Regional Utility Authority) Deepwater Intake and Plant expansion, which is already underway. This project is essential for increasing the capacity to draw water from Lake Travis, which will support the growing demand for water in the region. Round Rock's share of this project is $90.5 million.

Following this, the City is also contributing to the expansion of the BCRUA's water treatment plant, which will add an additional 10 million gallons per day (mgd) capacity by 2027/2028. This expansion is crucial for treating more water to meet the needs of the expanding population. Round Rock's share of this project is $41.7 million.

Another critical initiative is the planned expansion of the BCRWWS (Brushy Creek Regional Wastewater System) treatment plant, which will add another 10 mgd capacity by 2029/2030. This expansion will enhance the system's ability to treat wastewater, ensuring that the City can manage the increased wastewater generated by its growing community. Round Rock's share of this project is $125 million.

These projects are vital for securing the region's water supply and wastewater treatment capacity, supporting both current residents and future growth. The investments are designed to ensure that the infrastructure can meet increasing demands, maintaining reliable service for the City of Round Rock.

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