Water prices in Richardson rose for the fourth consecutive day on November 1st.
The rising rates are being driven by the North Texas Municipal Water District, a regional water supplier that sells to more than 45 municipalities and utility districts in the region.
Richardson's water rate will increase by 3%, the same amount as the city's rate increase last year.
Richardson residents are not alone, as Dallas, Garland, Prosper, Plano and other area cities will also be implementing water rate increases at the end of 2024.
In Plano, officials are trying to balance the amount paid for water across different billing tiers as an increase has been approved for the third year in a row. Before the rates were approved in September, a new study found that users paid less than the city did wholesale.
NTMWD's wholesale water prices also increased for the third consecutive year amid an $820.3 million budget aimed at meeting infrastructure needs across the service area.
In addition to its operating budget, the district has budgeted more than $1 billion to invest in capital improvement spending in the 2024-25 fiscal year, according to officials.
The primary reason for the wholesale price changes was population growth in NTMWD's service area, said NTMWD Communications Director Alex Johnson.
Collin and Dallas counties, which are partially served by NTMWD, are expected to have higher water demand than supply by 2030 unless the district takes action to expand and maintain its infrastructure. The trend is being seen across the state, which is expected to face a water deficit in 2022 unless more is done to improve access to water, according to a 2022 Texas State Water Plan report.
“We have made significant investments in infrastructure to ensure we meet the needs of our growing population and associated economic development,” Johnson said in an email.
Prosper's rate increase, finalized Oct. 15, was the first since 2019. The city government has been trying to absorb additional costs to keep water rates stable while encouraging residents to watch their water usage, Chris Landrum said , Finance Director of Prosper.
The structure
A number of factors contribute to rising water and sewer rates in Richardson, according to a presentation from Richardson Budget Officer Bob Clymire.
NTMWD's increase in wholesale water costs is expected to cost the city an additional $2.2 million next year, while wastewater treatment services will cost another $1.2 million.
The city also implemented a 3% performance-based pay increase for water and wastewater workers as part of its new budget, and city documents also cite an “unfunded EPA mandate related to inspecting the system for lead and copper pipes” as a cause additional cost pressure.
With the update, Richardson residents who use the same amount of water in 2023 and 2024 would pay a minimum of $0.21 more per month and a maximum of $0.93 more per month, depending on how much they used.
Average residential customers can expect their annual water bill to rise by $29, according to a budget presentation.
In 2024, Plano hired NewGen Strategies and Solutions to prepare a five-year forecast of water prices. NewGen presented study results in August that showed water users were not paying a fair share for water in the 1,001 to 5,000 gallon range, said Budget Director Karen Rhodes-Whitley.
According to the study, 35% of water bills issued between July 2023 and 2024 are for less than 5,000 gallons.
Plano officials plan to gradually increase the tier's water costs over the next three years until they match NTMWD's wholesale rates.
Before Prosper's Oct. 15 rate increase, which increased residents' rates by 6.35%, Prosper last changed its water rates twice in late 2019 and late 2012, Landrum said.
The city expects to pay for $13.6 million worth of water in 2025, Landrum said.
“Our purchase of water accounts for about half of the cost of our utility fund,” he said.
Prosper has tried to absorb the higher costs where possible, but has had to pass some of it on to residents, he said.
Wealthy residents can keep their bills lower by conserving water and only watering their lawns on designated days, Landrum said.
The frame
NTMWD serves 13 member cities in North Texas, including Plano and Richardson. Member cities play a unique role in NTMWD's regional water system by committing to cover the costs of the system, Johnson said.
NTMWD also provides water to 34 customer cities and utility districts. Customer cities, including Prosper, pay a premium of five cents per 1,000 gallons for water.
Wholesale water prices have increased for the past three consecutive fiscal years. More than half of the fees collected through wholesale water rates are reserved to cover capital project costs and maintenance.
The Texas State Water Plan recommends more than $10 billion in projects that NTMWD can pursue to meet future water needs.
Explain the role
NTMWD plans to invest more than $5 billion over the next 10 years to meet the increasing demands of a growing population, Johnson said. In the 2024-25 fiscal year alone, NTMWD's budget includes $1.1 billion for capital and maintenance projects.
“The rapid growth in our service area continues to drive our infrastructure investments,” Johnson said.
Put yourself in the right light
NTMWD's efforts to prepare for the future population can be seen across the state. According to the Texas State Water Plan, demand across Texas will exceed existing supply by 2030.
Texas faces two major challenges when it comes to water, said Jeremy Mazur, director of natural resources and infrastructure policy for Texas 2036.
First, the state is expected to face a water deficit of up to 6.9 million acre-feet by 2070, he said. Second, water and wastewater infrastructure across the state is placing strain on, and becoming a burden on, the communities it serves, he said.
“The problem is that while we have these financial assistance programs that have been approved by the Legislature and the state, they are not going to be enough in terms of what we end up having to spend on this water infrastructure long-term challenges,” Mazur said.
One more thing
The NTMWD board approved a new wholesale water tariff for customer cities during a meeting on November 21st. It is the first time since 1970 that the wholesale price for customer cities has been changed.
The NTMWD plans to gradually introduce a new customer contract template, which will come into force in August 2028. Under the new wholesale price, customer cities could pay up to 10 cents more than member cities.
Jenna Covington, executive director and general manager of NTMWD, said the wholesale price for customer cities has been a topic of discussion for decades. Authorities have spent time discussing it with client cities over the past few years before implementing the change.
“I am grateful for the spirit of cooperation and regionalism reflected in this process,” she said.
Reporter Alex Reece contributed to this story.
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