North Texas Municipal Water District (NTMWD) representatives recently updated Allen City Council on the factors driving wholesale rate increases for water and wastewater services. Allen, along with 12 other member cities, works with NTMWD to provide essential water and wastewater services for our community.
A $3.7 billion capital improvement plan to address aging infrastructure and build new facilities is the primary reason for rate increases. Although some increased costs are associated with new or increasing federal regulations.
“Water costs are increasing across the nation as providers invest in aging infrastructure and projects to support growing communities,” said Judd Sanderson, NTMWD Deputy Director of Finance.
Mike Rickman, NTMWD Deputy Director of Operations, explained that due to the lengthy process to develop new water supplies and construct facilities, the district must build now to meet future demands. While NTMWD serves approximately 1.6 million people today, this estimate is projected to be 2.5 million by 2040 as seen by the rapid growth in Collin County.
“Our cities are experiencing significant growth and water and wastewater infrastructure is essential to support that development,” said Rickman. “Next year we’ll start construction on a new reservoir which is vital to meet our region’s long-term water needs.”
Development of the Lower Bois d’ Arc Creek Reservoir at a cost of $1.2 billion is among the list of new projects. This project will be the first major reservoir constructed in Texas in 30 years. This was one of several projects detailed in the presentation.
Rickman advised that wholesale rates are based on what’s needed to serve peak demand. Operations, maintenance and debt service are all fixed costs. These are the expenses incurred regardless of how much water is used and they comprise 85% of the wholesale rate paid by member cities. The other 15% of the rate includes variable costs for treatment and energy that are specific to water consumption or the water used.
“Water rates pay for more than water,” added Sanderson. “They pay for the pumps, pipelines and treatment plants to deliver safe, reliable water to our homes and businesses.”
The NTMWD system includes 14 water pump stations, six water treatment plants, 14 wastewater treatment plants, three solid waste transfer stations and over 800 miles of water and wastewater transmission pipelines. Nearly 750 NTMWD employees deliver these services.
Sanderson reviewed projected wholesale water rate increases for the 2017-18 budget year that begins Oct. 1. The current rate of $2.53 per 1,000 gallons would increase to $2.78 per 1,000 gallons pending approval by the NTMWD Board of Directors in September.
Visit NTMWD.com to learn more about our regional water system.
You can also read more in the recent Allen Image article, “Counting the Cost of Water.”