City of Austin

The 5 percent system average water rate increase and updated rate structure approved by City Council in September 2012 will take effect with February 2013 water bills. The Council directed the City Manager to create a Joint Committee of three City Commissions, with input from the public, to develop recommendations for short and long-term financial plans to strengthen the financial stability of the Austin Water Utility. After a 6-month process which included 15 public meetings, and additional budget and rate hearings, the Council adopted the recommendations of the Joint Committee.

These Council approved recommendations aim to achieve a goal of 20% of total water revenue collected from fixed minimum charges. This will be accomplished by eliminating the current Revenue Stability Fee, and replacing it with:

• Residential volume-based tiered minimum charge
• Multifamily & Commercial meter-based fixed charge
• Large Volume fixed charge

New Residential volumetric rate block intervals are designed to better reflect residential usage patterns and further enhance water conservation.

A volume-based Reserve Fund Surcharge will be implemented for all customers to build a reserve to offset revenue losses caused by extreme weather patterns, both wet and dry.

Over 100,000 residential water customers that use less than 6,000 gallons of “essential water” will see a bill decrease or no increase. The average residential water customer’s annualized monthly consumption, based on 7,727 gallons, will have a water bill increase of $3.52, from $33.22 to $36.74. This includes the new Reserve Fund Surcharge.

• The monthly customer charge (based on a 5/8-inch meter) will remain $7.10 per month.
• The current meter-based Revenue Stability Fee ($4.40 with 5/8-inch meter) is being replaced by the new volume-based Tiered Minimum Charge.
• The current volumetric water tiers will change to better reflect residential usage patterns.
• The bill will include a new volume-based Reserve Fund Surcharge, which will be $0.12 per 1,000 gallons in 2013. Once the goal of the reserve fund has been met over a period of five (5) years, the surcharge may be reduced to maintain this goal unless the reserve is needed to offset revenue losses.

For multifamily & commercial rates and structure the rate increase impact will vary significantly depending on the meter size and water volume registered.

• The monthly customer charge structure will not change, and include only moderate rate changes.
• The current meter-based Revenue Stability Fee is being replaced by a new meter-based fixed charge to achieve the fixed revenue goals set by the Joint Committee.
• The volume rate structure will remain unchanged, with the rates changing to only maintain each customer class’ cost of service. Because the fixed charges are increasing to achieve the goals set by the Joint Committee, the volume charges will increase at a lower rate.