Amarillo puts billing crisis ahead of next water-rate move
City of Amarillo Utilities, Texas · Meeting date: October 27, 2026 · Published: October 28, 2026
Amarillo’s council directed staff to develop customer protections and proactive bill reviews after reports of unexplained consumption spikes. A utility-rate consultant said no further rate action should be taken now beyond increases already approved in the budget process.
Key points
- Councilmembers called for disputed water accounts to be protected from late fees, testing charges and disconnection while cases are reviewed.
- Staff was asked to identify abnormal consumption spikes proactively, rather than limiting reviews to customers who complain, and to develop a customer-relief process.
- The rate study, paused in May amid billing-system concerns, is not recommended to restart until after the start of 2027; any new rate adjustment would be considered no earlier than October 2027.
- Preliminary utility sales and service-fee revenue reached $112.7 million in FY2025-26, up from $99.1 million in FY2024-25, according to figures presented to council.
Full report
Amarillo City Council has made restoration of confidence in its utility-billing system the immediate priority before considering further changes to water rates and rate design.
During an extended review of customer complaints, councilmembers cited accounts showing abrupt, unexplained jumps in recorded water use, including vacant properties and households reporting lower occupancy. Several members argued that customers whose bills are under dispute should not face the threat of service disconnection while the city investigates.
The council directed staff to develop measures that would waive late fees and meter-testing charges for disputed accounts, prevent service interruption while a dispute is open, and establish payment arrangements based on historic use. Staff was also asked to identify anomalous bills across the customer base and consider credits proactively, rather than limiting relief to residents who contact the city.
Councilmembers discussed a temporary relief fund, with one member suggesting an initial $500,000 allocation for extreme cases, although no formal funding action was taken. Staff is to return with proposed criteria, a process for customers to dispute bills, and regular public reporting on the response.
NewGen Strategies & Solutions, which is reviewing the billing system and conducting the utility rate study, said it had paused rate-study work in May as concerns emerged. The consultant recommended no additional rate changes at this time beyond action already taken through the city budget process, and said the study could resume after the start of 2027. Under that approach, any further rate adjustment would be considered no earlier than October 2027.
The discussion exposed a tension between customer affordability and the utility’s capital requirements. The consultant said Amarillo faces major investment needs in its wastewater treatment plant and regional water-supply projects, and cautioned that postponing revenue action can require larger future adjustments. The city currently uses four water-consumption tiers, with the consultant noting that the price differential between tiers is not consistent.
Councilmembers considered retaining the current charge for the 3,000-10,000 gallon tier while examining steeper charges for higher-use customers, but no rate-structure amendment was adopted.
The city reported preliminary FY2025-26 utility sales and service-fee revenue of $112.7 million, compared with $99.1 million in audited FY2024-25 accounts. Total water and sewer revenue was reported at $149.7 million, including $20 million in state grants and other revenue sources.
Separately, council approved a $301,800 purchase from Austin Armature Works for three slow-close check valves, installation work and associated modifications at the River Road Wastewater Treatment Plant. The project replaces more than 30-year-old valves serving the T-4, T-5 and T-6 pumps and transfers the same amount from the wastewater improvements and repairs capital project to the River Road flow-control-valves project.
This summary was generated by AI based on the source document and may contain errors.
Source: Amarillo City Council Regular Meeting, City of Amarillo Utilities