Pflugerville considers sweeping water and wastewater rate restructure to address equity

Pflugerville considers sweeping water and wastewater rate restructure to address equityA proposed rate overhaul by consultant Baker Tilly would eliminate tiered water rates and uniform wastewater base charges, significantly shifting cost burdens from low-volume residential users to multifamily and commercial customers.

The proposed structure transitions wastewater base charges from a uniform $65 fee for all meters to a tiered fee based on meter size.

Water rates would shift from an increasing block tiered structure to a simplified single volumetric charge per customer class.

The restructuring aims to close the cost-of-service gap between single-family and multifamily users, raising average apartment unit bills while lowering low-volume residential bills.

The utility's revenue requirements include $14 million in water O&M, $12 million in wastewater O&M, and up to $58 million in combined annual debt service.

The City of Pflugerville, Texas, is evaluating a comprehensive overhaul of its water and wastewater rate structures to address equity imbalances and cost-of-service misalignments across customer classes. Following a rate study presented by financial consultant Baker Tilly at a July 14 council meeting, the city is considering abandoning its tiered water volumetric rates and uniform wastewater base charges in favor of a simplified, meter-scaled model. Under the current structure, all wastewater customers pay a flat $65 monthly base charge regardless of meter size, coupled with a uniform $6.50 per 1,000-gallon volumetric rate. The proposed overhaul would implement a wastewater base charge scaled to meter capacity and differentiate volumetric charges by customer class. For water, the city would retain meter-sized base charges—albeit at reduced rates—but replace its increasing block tiered volumetric rates with a single, flat volumetric charge tailored to each customer class. A representative from Baker Tilly noted that the restructuring heavily targets cost equity between single-family residential users and multifamily apartment complexes. Currently, a 300-unit apartment complex with a 6-inch meter divides the single $65 wastewater base charge across all of its units. As a result, an apartment unit using 3,000 gallons pays approximately $50.30 monthly for combined water and wastewater service, while a single-family residential customer using the same volume pays $155.35. The proposed rates would narrow this gap, increasing the apartment unit's average bill to $110 while lowering the residential bill to $133.57. The structural shift is designed to ease the rate burden on lower-volume residential customers while ensuring the utility meets its significant financial obligations. The city's revenue requirements incorporate $14 million in annual operation and maintenance (O&M) for water and $12 million for wastewater, alongside up to $30 million in annual water debt service and $28 million in wastewater debt service. These figures account for the operational costs of new treatment plants coming online, including property insurance, chemicals, and utilities. If the city opted to maintain its existing rate structure, it would require a 5% across-the-board rate increase for water and a 16.5% increase for wastewater over the next three fiscal years to meet its revenue requirements. While the simplification to a flat volumetric water rate reduces base charges, some council members expressed concern that eliminating the tiered conservation rates might remove the financial incentive for residents to limit water usage, particularly during peak summer irrigation months. City staff and consultants are expected to review options for a two-tier residential rate to maintain conservation incentives before the first reading of the proposed rate ordinance, which is scheduled for September.