Title
Consider approving Ordinance No. 3956, amending portions of the “Appendix A - Fee Schedule” of the Code of Ordinance, relating to fees for water and wastewater rates under Sections 86-276 and 86-277, respectively; and take appropriate action.
Body
REQUESTOR:
Public Works Department
BACKGROUND:
The City is experiencing rising costs from the Dallas Water Utility (DWU) and Trinity River Authority (TRA), the city’s water and wastewater providers. These increases are tied to inflationary pressures, infrastructure investment needs, and regional service demands. These cost increases directly affect the city’s utility budget. Despite these rate increases, the city has not adjusted its rates in the past 10 years. Without corresponding adjustments to water rates, the city risks underfunding critical water and wastewater operations, which would undermine system reliability, regulatory compliance, and service quality.
Additionally, the City’s capital improvement project for the water and wastewater infrastructure, coupled with compliance obligations mandated by the Texas Commission on Environmental Quality (TCEQ) and the Environmental Protection Agency (EPA), necessitates proactive measures to ensure long-term sustainability and to mitigate potential liabilities regarding pumping stations and hold tanks for the water and wastewater system.
The proposed rates will remove the wastewater limit of 10,000 for single-family residential homes. This means residential homes would be charged for wastewater over 10,000 gallons. TRA still charges the city for treating wastewater volumes above 10,000 gallons.
Additionally, Senior Citizens (age 65 and older) or disabled persons may apply for a 10% discount on the water bill for a residential account held in their name, with a senior homestead exemption, a current lease held in their name, or proof of disability. The discounts cannot be combined. The discount applies to single-family residential homes at 105% of the median home value.
To address these concerns, the city has prepared a rate model with New Gen. A rate model is a financial analysis method that enables decision-makers to explore various rate scenarios when setting utility base and volumetric rates. The model illustrates operational and capital infrastructure improvements and funding requirements for future years. The primary goal is to determine appropriate rate levels and rate structures that generate sufficient revenue to cover annual operating costs and scheduled capital projects. The model projects future operating expenses and capital requirements necessary to meet regulatory requirements, address aging infrastructure, and accommodate anticipated growth. It defines rates to allow for the accumulation of sufficient cash reserves to cover unexpected costs, emergencies, and future capital needs.
DISCUSSION:
The City Council will consider adopting water and wastewater rate changes for FY-26 through FY-30.
DISTRICT:
Citywide
FISCAL IMPACT:
Increased revenue to the water/wastewater utility fund.
ATTACHMENT(S):
1. Ordinance No. 3956
2. Exhibit A
3. Presentation